Both tax and campaign finance laws are relevant in analyzing whether churches and other houses of worship may engage in campaign activity. Under the tax laws, houses of worship that benefit from 501(c)(3) tax-exempt status may not participate in such activity. They are also subject to regulation under campaign finance laws. Legislative History of the Prohibition

The IRC's campaign prohibition is sometimes referred to as the "Johnson Amendment," after then-Senator Lyndon Johnson, who introduced the provision as an amendment to the Revenue Act of 1954. Other types of political activities are permitted. Houses of worship may invite candidates to appear at services and other functions so long as no bias for or against a candidate is exhibited. Religious leaders may endorse or oppose candidates in speeches, advertisements, etc., in their capacity as private citizens. The house of worship may not support the activity in any way. Constitutionality of the Prohibition

Some have argued that the political campaign prohibition violates the free exercise and free speech rights of churches under the First Amendment of the U.S. Constitution. Two U.S. Courts of Appeals have upheld the prohibition against First Amendment challenges. Campaign Finance Law

The Federal Election Campaign Act (FECA), which regulates the raising and spending of campaign funds, is separate and distinct from the tax code. Due to the tax code prohibition discussed above, houses of worship with 501(c)(3) status are generally not permitted to engage in the activities regulated by FECA, and thus the Citizens United decision does not appear to impact them in a significant manner. Legislation in the 112th Congress

In the 112 th Congress, legislation, H.R. If the bill were enacted into law, houses of worship with 501(c)(3) tax-exempt status would be able to engage in campaign activity without jeopardizing their tax-exemption so long as the other criteria for such status were met. In prior Congresses, there were bills that took different approaches to permitting houses of worship to engage in some level of campaign activity.
As the 2012 election cycle heats up, there are allegations that some houses of worship have engaged in impermissible activities. Under the Internal Revenue Code (IRC), churches and other houses of worship with tax-exempt 501(c)(3) status may not participate in campaign activity. They are permitted under the tax laws to engage in other activities that are political in nature (e.g., distribute voter guides and invite candidates to speak at church functions) so long as the activity does not support or oppose a candidate. Additionally, religious leaders may engage in campaign activity in their capacity as private individuals without negative tax consequences to the house of worship.
The tax code's political campaign prohibition is sometimes referred to as the "Johnson Amendment," after then-Senator Lyndon Johnson, who introduced the provision as an amendment to the Revenue Act of 1954. While some have argued the prohibition violates the free exercise and free speech rights of houses of worship under the First Amendment, the two federal courts of appeals to address the issue have not agreed with this position. In recent years, numerous churches have participated in an event known as "Pulpit Freedom Sunday," during which pastors preach a political sermon. A purpose of the event is to develop litigation for another challenge to the prohibition on First Amendment grounds. This year, Pulpit Freedom Sunday was held on October 7, 2012.
Separate from the prohibition in the tax code, the Federal Election Campaign Act (FECA) also regulates the ability of houses of worship to engage in electioneering activities.
In the 112th Congress, H.R. 3600 would repeal the Johnson Amendment, thus permitting houses of worship and other 501(c)(3) organizations to engage in campaign activity without jeopardizing their tax-exempt status so long as the other criteria for tax-exempt status are met.