12/3/2012 - December 2012 SLI Educational Update - May Churches Now Engage in Candidate Campaigns?
AN EDUCATIONAL UPDATE FROM
THE SOUTHEAST LAW INSTITUTE™, INC.
To: SLI Supporters
Date: December 2012
From: A. Eric Johnston
Re: May Churches Now Engage in Candidate Campaigns?
In late October it was reported the Internal Revenue Service (“IRS”) was suspending audits of churches against which complaints were made because they were engaging on behalf of or against candidates in political races. That has now been confirmed, but there is not a final resolution. Our position at this time is to act cautiously, but optimistically, that churches will be freed of the shackles on free speech. We suggest caution because many pastors have agreed with the prohibition of candidate campaigning. Virtually every active pastor has been educated and matured with the concept of this separation of church and state.
History is replete with churches taking political positions and even speaking for candidates. These were particularly true in those years before mass communication. The problem arose in 1954, when U.S. House Majority Leader Lyndon B. Johnson got passed what is known as the “Johnson Amendment.” This amendment explicitly prohibited nonprofit organizations from engaging in campaign activity. Since then, out of respect for the law, pastors and churches did not engage in candidate campaigns.
In 2008, the Alliance Defending Freedom began “Pulpit Freedom Sunday.” The goal was to confront the Johnson Amendment through a court case and have it declared unconstitutional. This effort gained significant momentum in the 2012 election because President Barack Obama’s position and policies were virtually in all respects antithetical to scripture. The feelings were so strong that Reverend Billy Graham did what he had never done during the 95 years of his life and issued a political statement. While he did not endorse Mitt Romney, his newspaper ads did so by very clear innuendo.
In 2009 a federal court threw out a case by the IRS against a church for engaging in a candidate campaign, because the audit did not come from an IRS official with sufficient rank. IRS regulations were vague and this increased to the point of questioning whether the IRS had the ability to regulate churches.
Setting up a nonprofit corporation is a two step process: (1) incorporate under state law [to own property, transact business, etcetera] and (2) apply to the IRS for tax exempt status. However, under 28 USC § 508(c)(1)(A), churches are exempt from applying for tax exempt status because historically churches have not been regulated by the government. State laws give virtually no ability to regulate the operation of the church. For any other nonprofit organization, it must submit to a very large body of federal regulations in order to be tax exempt, that is, its contributions are tax deductible to the donor, but not taxable to the entity. With the exemption, churches are under no authority of the federal government.
So the big question for churches right now is, what do we do about participating in candidate campaigns? While it is some months before there will be any other campaigns, the processes of government move very slowly. There is no prediction on when the IRS may decide what its new regulations will be. For the time being, the IRS has said there will be no audits of churches against which complaints are filed for engaging in candidate campaigns. Therefore, it will be up to the individual pastor and his church on whether the church should take a position on a candidate, which would include the pastor speaking for or against the candidate from the pulpit.
Our hope is that the ultimate decision will be churches have their constitutional right of speech on issues, including on candidate positions that are important to the teachings of the church. The goal is not for churches to become political machines, but to speak out in our modern culture, similar to the way it did in early days, but now on issues such as same-sex marriage, abortion, and for some, the environment, the poor, etcetera.
If the IRS decision runs true to form, it will attempt to develop regulations to audit churches and to revoke tax exempt status. That will bring on the constitutional challenge noted above, that the church does not receive its recognition from the federal government, but exists separately with protected constitutional free speech rights. The best remedy to the situation would be for the Congress to repeal the Johnson Amendment and affirmatively state that the church is exempt from any federal regulation and may engage in any constitutionally protected conduct, including speech in candidate political races. With a divided Congress and Barack Obama as President, this is not likely.
If this freedom is restored, it will require pastors to adjust their thinking and recognize and use, to the extent they deem appropriate, political free speech. Obviously, every church would proceed with internal caution so as not to offend its own members but to have an agreement by the members as to what the church’s position shall be. The country is governed by its people. The people are governed by their personal beliefs and for Christians, these are based on the Bible. There is absolutely no reason at all that the church cannot speak out on issues important to the lives of our citizens and the health of our country.
 We see all too frequently attorneys, accountants and other advisors telling churches they must apply for tax exempt status: A CHURCH SHOULD NOT AND IS NOT REQUIRED TO APPLY TO THE IRS FOR TAX EXEMPT STATUS.
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