Sending Office: Honorable Mark Pocan
Sent By:
Alicia.Molt-West@mail.house.gov

Dear Colleague:

I invite you to join me in sending a letter to the Conference Committee currently negotiating the “Tax Cuts and Jobs Act,” H.R. 1, in opposition to rolling back the Johnson Amendment.
As you may know, the Johnson Amendment prohibits tax-exempt groups, including churches and other religious organizations, from engaging in political activity.

The House passed “Tax Cuts and Jobs Act” repeals the Johnson Amendment, while the Senate bill leaves this important provision in place. Thousands of religious groups, nonprofit entities, and an overwhelming percent of the American population oppose this
change because of concerns that repealing the Johnson Amendment would dramatically increase untraceable and unaccountable political spending. This could  potentially lead to the creation of “sham churches” solely existing to for political purposes.  Additionally,
charities and places of worship remain deeply concerned that repealing the Johnson amendment will force religious institutions to take sides on political debates on which they have no interest in engaging and subject them to heightened financial oversight
from the IRS.

Studies have shown that 79% of Americans oppose political endorsements from churches. Currently, individual pastors and clergy are currently free to personally endorse and support candidates- and frequently do so.  Repealing the Johnson amendment could convert
many religious institutions into Super PAC with unlimited amount of dark money.

Our nation was founded on basic principles of separate of church and state- repealing the Johnson Amendment clearly crosses this line and will only continue the spread of money in politics.

Sincerely,

Rep. Mark Pocan

 

DRAFT TEXT

We write to express our concern regarding the harmful language in section 5201 of H.R. 1, which would permit all 501(c)(3) nonprofits, including churches, to engage in partisan political activity while maintaining their tax-exempt status. This unpopular
provision would repeal the so-called Johnson Amendment, which is vital to American charities. We urge the conferees to remove this provision as part of the joint Senate-House conference negotiation.

The Johnson Amendment ensures that charities are not able to use tax-exempt funds for political purposes. Under the existing tax code, churches and tax-exempt 501(c)(3) nonprofits may not endorse or oppose political candidates. They may discuss and advocate
on issues; but they may not come out for or against specific candidates using charitable and tax-deductible resources. Legal experts, including the D.C. Circuit, have found the Johnson Amendment to be constitutionally sound and consistent with the free speech
rights, free exercise rights, or rights under the Religious Freedom Restoration Act for religious organizations.

The Johnson Amendment is very popular among religious Americans, nonprofits, and the public generally. Poll after poll shows that the American people want to keep politics out of their nonprofit boardrooms and pulpits. According to Lifeway Research,
a research firm dedicated to equipping church leaders with public insight, nearly 80% of Americans oppose pastors endorsing a candidate in church and 75% oppose churches publicly endorsing candidates. Religious leaders support the rule, including more than
4,200 faith leaders and over 100 religious organizations who asked Congress to protect the rule. Nonprofits also support the safeguard, including more than 5,500 nonprofits from all 50 states also asked that the rule remain in place.

We fear that the consequences of repealing this amendment, which has been pushed by a vocal minority in spite of strong contrary public opinion, have not been fully considered. The unintended impacts of eliminating the Johnson Amendment are far-reaching
and deserve the consideration of the Conference Committee before negotiations are completed.

To fulfill the goals of transparency and accountability, 501(c)(3) nonprofits are required to file an annual report with the IRS that details specific financial information, and every penny donated to and spent by the organization is tracked by Form
990. Unlike other 501(c)(3)s, churches are explicitly exempt from filing this return under 26 U.S.C. § 6033. If churches are allowed to enter the partisan political fray with this glaring lack of transparency, we will see an infusion of dark money into politics
that cannot remain unregulated.

Without the Johnson Amendment, any donor could write a check to the nearest church for any amount, earmark the donation for politicking, and take the tax write-off. The church could then spend the donation on anything, including politicking. Churches
will become unregulated, unaccountable, opaque super-PACs. This rule gives PACs an incentive—almost a mandate— to reorganize as churches to compete for donors who will prefer to give tax-deductible donation.

The de minimis limiting language in the bill attempts to minimize the impact of the broader provision impacting the Johnson Amendment, but the language is so vague and broad that it is almost meaningless. The provision offers no threshold or guidance
for what constitutes a de minimis expense, information that would be particularly important when applying the principal to a multimillion dollar megachurch, for example. Further, the de minimis language opens the door to a pastor endorsing a candidate during
the course of a sermon and subsequently sharing the information electronically to all parishioners and their social media networks has the potential to be more impactful than a large financial expenditure in support of the candidate.

Equally important, the de minimis will require the IRS to look into the church finances to determine whether or not the expenditure was tiny relative to the overall budget. Thus, repealing the Johnson Amendment will undoubtedly lead to greater oversight
and regulation of churches, not less – a likelihood that is of concern to both religious and secular institutions.

The Johnson Amendment is an important safeguard that ensures tax-deductible charitable donations, meant to serve the community, go to charitable works rather than political campaigns.  Accordingly, we urge you to remove Section 5201 of H.R. 1 from the
conference report and we thank you for your consideration. We look forward to working with you on this matter.

Sincerely,

Related Legislative Issues

Selected legislative information: Finance, Judiciary, Taxes

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