A Texas lawsuit and a surprising IRS shift could change the rules for religious speech in the United States.
The Johnson Amendment, which has traditionally served as the boundary preventing churches from making political endorsements, is now facing increased scrutiny and potential challenges to its continued relevance.
Discover where the amendment stands and why it might matter for your nonprofit.
The Johnson Amendment: A quick refresher
For decades, the Johnson Amendment has prohibited tax-exempt organizations, including houses of worship, from directly or indirectly participating in political campaigns. The rule is meant to uphold the separation of church and state and maintain the integrity of both elections and charitable giving. Yet, its critics — especially in religious circles — have long argued it stifles free speech and religious freedom.
The lawsuit: Churches vs. the IRS
On August 28, 2024, a coalition of conservative religious groups filed suit in the U.S. District Court for the Eastern District of Texas. The plaintiffs include:
- National Religious Broadcasters
- Intercessors for America
- Sand Springs Church (Athens, Texas)
- First Baptist Church of Waskom (Waskom, Texas)
Their argument? That the Johnson Amendment violates their rights under:
- The First Amendment (free speech and free exercise of religion)
- The Fifth Amendment (due process and equal protection)
- The Religious Freedom Restoration Act, which prohibits rules that substantially burden religious exercise without compelling interest.
The plaintiffs sought a court order declaring the Johnson Amendment unconstitutional as it applies to their religious speech and an injunction preventing the IRS from enforcing it.
A surprising shift: The IRS backs down some
By July 7, 2025, the case took an unexpected turn. The IRS, rather than fighting to uphold the Johnson Amendment, agreed to a proposed consent judgment with the plaintiffs, including:
- The IRS conceded houses of worship can address their congregations about political candidates or elections during religious services, as long as the message is framed as a matter of faith.
- Such internal, faith-based speech would not count as “participation or intervention” in a political campaign — and would not threaten the church's tax-exempt status.
- The IRS agreed not to enforce the Johnson Amendment against the two plaintiff churches for this kind of religious communication.
The proposed settlement marked the first time the IRS has formally given ground on the Johnson Amendment’s scope. If approved, clergy could endorse or oppose a candidate from the pulpit without fear of losing the church’s nonprofit status — so long as the endorsement happens in a religious context and is directed to the congregation.
Not so fast: A watchdog steps in
On July 10, 2025, Americans United for Separation of Church and State (AU) filed a motion to intervene. Alarmed by the IRS’s position, AU argued the public interest in maintaining the Johnson Amendment needed defending. The court allowed AU to participate as a “friend of the court,” giving them until July 25 to argue against the settlement.
AU’s concern? That the IRS’s stance would undermine election integrity and the principle of church-state separation by giving religious entities special treatment. The judge is now considering these arguments and has not yet approved the settlement.
What happens next with the Johnson Amendment?
As of late July 2025, the consent judgment is still waiting for a judge’s signature. Until then, the Johnson Amendment remains in effect for all, including the plaintiffs. However, the IRS’s public concession has already signaled a shift in enforcement policy — one that other churches may try to cite in future disputes.
What does the settlement do?
- It applies only to the two plaintiff churches and specifically protects their internal, religious communications about politics.
- It does not formally change the rules for other religious organizations or nonprofits.
- But the IRS’s constitutional reasoning — arguing applying the Johnson Amendment to internal church speech could violate the First Amendment — could be influential in future cases.
Why this is unprecedented
Before this case, the IRS had never publicly acknowledged the Johnson Amendment might be unconstitutional in any context, nor created a written exception for internal church speech. While it was widely understood the IRS rarely enforced the amendment on sermons, this settlement represents a significant shift — opening the door for churches to engage in what was previously off-limits speech, so long as it stays “in the family” of the congregation.
With the court’s decision pending, all eyes are on Texas to see whether this settlement becomes a new precedent or remains a narrow exception. Either way, the debate over where the line is drawn between faith and politics is entering a new — and potentially transformative — chapter in American law.
Not a church? Why this may impact your nonprofit
While the pending settlement is focused on two specific churches, the Johnson Amendment applies to all tax-exempt entities, and the IRS’s shifts could have impact on the amendment’s future application to all nonprofits. Some nonprofit advocacy groups say the Johnson Amendment helps to guard organizations focused on the public good from being pulled into the political fray.
How CLA can help nonprofits in times of change
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