Despite efforts by the House, the Tax Cuts and Jobs Act does NOT scale back the Johnson Amendment.This is the rule that prevents 501(c)(3) organizations–public charities and private foundations–from advocating for the election or defeat of a candidate for public office. The rule is discussed in more detail here.
The House tax bill would have allowed electioneering under certain circumstances. The conference report describes the House provision as follows:
For such purposes, an organization shall not fail to be treated as organized and operated exclusively for a purpose described in section 501(c)(3), nor shall it be deemed to have participated in, or intervened in any political campaign on behalf of (or in opposition to) any candidate for public office, solely because of the content of any statement that: (A) is made in the ordinary course of the organization’s regular and customary activities in carrying out its exempt purpose; and (B) results in the organization incurring not more than de minimis incremental expenses.
However, the conference report makes clear that this concept did not survive the reconciliation process and thus did not make it into the Tax Cuts and Jobs Act. Thus, 501(c)(3) organizations must continue to avoid electioneering if they wish to maintain their tax-exempt status.
For more on the Tax Cuts and Jobs Act, click here.
Posted by: Joel D. Roettger, JD, LLM, EPLS