[dc]T[/dc]he Senate has stripped language from a House spending bill that would have stopped the Internal Revenue Service from revoking the tax-exempt status of non-profit organizations that engage in campaigning for political candidates.
As passed by the House of Representatives on July 19, 2018, by a vote of 217 to 199, Section 112 of H.R. 6147, the “Department of the Interior, Environment, and Related Agencies Appropriations Act of 2019” would have taken away funding for the IRS to enforce the Johnson Amendment, which prohibits tax-exempt organizations from engaging in political campaigning for or against candidates. Non-profit organizations may address current legislative or policy issues in a non-partisan manner.
Although members of the House had attempted to remove the language, they failed to do so, but between July 19 and August 1 the Senate reviewed numerous amendments and ultimately removed Section 112. The revised bill overwhelmingly passed the Senate by a vote of 92 to 6.
While the IRS has rarely attempted to enforce the Johnson Amendment, it is widely thought that its elimination would open the floodgates for non-profit organizations to begin to divert non-traceable tax-deductible “dark money” donations to political campaigning on behalf of political candidates and strike against the non-partisan nature of non-profit charities.
Last year, a similar attempt to revoke the Johnson Amendment failed after Democrats invoked the “Byrd rule,” which prohibits reconciliation tax bills from including “extraneous” provisions not related to federal revenue and spending.
In a May 4, 2017, executive order, President Trump ordered that the IRS limit enforcement of the Johnson Amendment “to the extent permitted by law.” Despite claims to the contrary, the order did not alter or eliminate the Johnson Amendment, and it remains in force.
Takeaway: Eliminating the Johnson Amendment plays well with “the base,” but most non-profits really don’t want it eliminated because they do not want the pressure from donors to deal with electoral politics. So the repeal language passes in the House version of a spending bill and gets kicked from the Senate due to the obscure Byrd Rule. This happened last year as well. The Trump administration issued an executive order about it in 2017, but avoided making any substantive changes. If Congress were really serious about eliminating the Johnson Amendment, it would be done in a separate piece of legislation.