The long-standing restrictions on political activity by tax-exempt organizations remain firmly in place after a recent federal court decision. In National Religious Broadcasters v. Bessent, a proposed settlement that could have significantly narrowed enforcement of the Johnson Amendment was rejected.
While some organizations hoped the case would provide clarity or relief from existing rules, the court ultimately dismissed the case without addressing the constitutional issues. As a result, nonprofits must continue to operate under the current framework governing political campaign activity.
Background on the Johnson Amendment
The Johnson Amendment is part of the Internal Revenue Code and applies to organizations classified under IRC Section 501(c)(3).
Under this rule, nonprofits are prohibited from:
• Participating in political campaigns
• Endorsing or opposing political candidates
• Contributing resources to campaign activities
Violating these restrictions can result in penalties, including the loss of tax-exempt status.
The Proposed Settlement and Its Implications
The case involved religious broadcasters and churches who argued that the Johnson Amendment violates First Amendment protections, particularly in the context of religious speech.
At one point, the IRS agreed to a proposed settlement that would have limited enforcement of the law in specific situations, particularly:
• Sermons and religious communications
• Speech delivered in a religious context
• Certain forms of political expression tied to faith-based messaging
If approved, the settlement could have created a narrower interpretation of what constitutes prohibited political activity for nonprofits.
Why the Court Rejected the Settlement
The federal district court declined to approve the settlement and instead dismissed the case for lack of jurisdiction.
This means:
• The court did not rule on whether the Johnson Amendment is constitutional
• The proposed changes to enforcement were not adopted
• The case ended without modifying existing legal standards
Because the dismissal was procedural rather than substantive, the underlying legal questions remain unresolved.
What This Means for Nonprofits
For nonprofit organizations, the practical outcome is straightforward:
Nothing has changed.
Organizations must continue to comply with existing rules, including:
• Avoiding political endorsements
• Maintaining neutrality in elections
• Ensuring communications do not support or oppose candidates
Even informal or indirect political messaging can raise compliance concerns, especially in public-facing communications or leadership statements.
Ongoing Uncertainty Around Enforcement
Although this case did not alter the law, it highlights continued debate around:
• The balance between free speech and tax-exempt status
• The role of religious organizations in political discussions
• Potential future legal or legislative challenges
Policymakers and advocacy groups continue to examine whether the current framework remains appropriate in today’s political and social environment.
The rejection of the settlement in National Religious Broadcasters v. Bessent reinforces the status quo for nonprofit political activity. While some expected the case to reshape enforcement of the Johnson Amendment, the court’s dismissal leaves the existing rules fully intact.
For nonprofits, the takeaway is clear: maintain strict compliance with political activity restrictions and monitor ongoing legal developments. Until further guidance or legislative changes emerge, the Johnson Amendment continues to define the boundaries of permissible conduct for 501(c)(3) organizations.
