Sam Brunson Muses about the Johnson Amendment

Fellow NLPB Blogger Sam Brunson has posted a provocative blog post over at By Common Consent, a blog by and for Mormons. He describes the legal consequences if the Church of Latter-day Saints were to officially “counsel its members to vote against [Trump]” because he “poses significant community and moral consequences to the country.” Putting aside for the moment the profound unlikeliness that the Church would ever do that, and putting aside Brunson’s own claim that deciding whether or not it should do so is “far above [his] paygrade,” Brunson argues that the legal consequences would be, “Honestly, probably nothing.” He explains (i) that the IRS has been loath to enforce the prohibition on campaign intervention lately; (ii) that the punitive excise tax on campaign intervention is likely to be very small when an organization violates it with a single electronic communication; and (iii) that the D.C. Circuit Court famously explained that a revocation of a church’s tax exemption would have minimal impact on the church because it could just hold itself out as tax exempt afterwards as long as it stopped violating the law.

I’m not sure I agree, to say the least. First, while it is true that the IRS appears to be extremely cautious in its enforcement of the campaign intervention prohibition these days, it is hard to imagine a more perfect test case than an official statement from a massive church against a conservative candidate.  After all, Trump himself campaigned heavily on his (never delivered) promise to “smash” the so-called Johnson Amendment in order to permit political endorsements from churches. I don’t think irony drives much in the way of IRS enforcement decisions, but come on. Second, while Sam may be right about the magnitude of the excise tax, I published an article back in 2009 providing an argument for calculating the excise tax in a much more expansive way. Third, I’ve always been deeply skeptical of the DC Circuit’s minimization of the burden to a church of the IRS revoking its exemption. It almost seems glib, and it’s certainly not necessary for the holding. Surely, even if the revocation of the church’s tax-exempt status was only operative for the year in which the violation occurred, that retroactive one-year revocation would have significant implications. Even if donors did not retroactively lose the deductions associated with their contributions, the church would have to figure out how its massive investment earnings should have been taxed.

Finally, I had to comment on Sam’s post just so I could post a link to the ad that was at issue in Branch Ministries v. Rossotti, 211 F.3d 137 (D.C. Cir. 2000). My favorite part of the ad is how it says, “tax deductible donations for this advertisement gladly accepted.” It’s rare that something explains so clearly the benefits of the law it is violating right in its own text.

Benjamin Leff