Repeal of 1954 Johnson Amendment

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On January 3, 2017, in order to restore the Free Speech and First Amendment rights of churches and tax-exempt organizations, the repeal of the 1954 Johnson Amendment was introduced in the House of Representatives by Representative Walter B. Jones, Jr. [R-NC-3] of the House Ways and Means Committee.

This bill amends the Internal Revenue Code to repeal the prohibition against churches and other tax-exempt organizations participating in political campaigns or supporting or opposing candidates for public office. The bill specifies that provisions of the Federal Election Campaign Act of 1971 are not invalidated or limited by the repeal.

Currently, 501 (c)(3) organizations are strictly prohibited from participating in any form of political activity. Part IV of Form 990 specifically asks the following question:

Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office? If “Yes,” complete Schedule C, Part I.

This current prohibition not only subjects 501(c)(3) organizations to a two-tier excess tax on the political expenditures, but they can also be stripped of their tax-exempt status by the IRS.

Be on the lookout for future updates on this bill.

Kevin Margiatto, CPA Kevin Margiatto, CPA
T (732) 828 1614
kmargiatto@withum.com

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Repeal of 1954 Johnson Amendment

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