On May 4, 2017, President Trump signed an executive order seeking to promote “free speech and religious liberty” by allowing churches to engage in more political activity. Absent further action by the IRS or Congress, this executive order does not, in any meaningful way, impact the ability of churches or other 501(c)(3) organizations to engage in political advocacy.
In practice, the laws prohibiting political intervention by churches were rarely enforced; and when they were, it was only in the most egregious of cases. By announcing the policy that the IRS would, “to the greatest extent practicable and to the extent permitted by law,” not enforce the existing law, the Trump Administration is simply announcing publicly a policy that experienced tax practitioners have long-known to be the case.
It is also important to understand that President Trump’s executive order does not change the law. To be clear, it provides guidance on how existing law should be enforced but does not change the underlying law relating to political speech by churches. Furthermore, it does not directly affect interpretation or implementation of any rule or regulation with respect to non-church charities or nonprofits.
Because this executive order does not change the law—merely the interpretation and enforcement of it—future presidential administrations can certainly roll back the executive order and reverse course. It is also worth noting that, if such a new administration were to take over in 2020, the audit period for churches could cover activities in 2017 and later.
Most substantively, it is important to focus on the words of the order itself.
In particular, the Secretary of the Treasury shall ensure, to the extent permitted by law, that the Department of the Treasury does not take any adverse action against any individual, house of worship, or other religious organization on the basis that such individual or organization speaks or has spoken about moral or political issues from a religious perspective, where speech of similar character has, consistent with law, not ordinarily been treated as participation or intervention in a political campaign on behalf of (or in opposition to) a candidate for public office by the Department of the Treasury.
The order seems to say that, if a church engages in speech that the IRS has treated as participation or intervention in a political campaign in the past, then the IRS may continue to regulate it, provided that interpretation is consistent with existing law. Furthermore, this “similar character” test is not limited to past treatment of speech by churches. In other words, speech that the IRS has historically treated as political intervention by a non-church charity or nonprofit would, under this language, seem to be a permissible basis for an adverse action against an individual, house of worship, or other religious organization.
It remains to be seen how the IRS will interpret and apply this order. There will continue to be vigorous debate about whether churches should be subject to restrictions on political speech, and it is possible that a legislative change might be included as part of the tax reform package being negotiated in Congress. However, for religious organizations seeking legal certainty before engaging in political speech, this order would appear, on its face, to leave important questions unanswered.
This blog post was written by Karen Blackistone Oaks, a partner with The Gober Group. She specializes in advising clients that are engaged in multi-faceted, multi-million dollar policy campaigns that incorporate a wide range of advocacy strategies.