Key Facts
- Due to the draconian Anti-Injunction Act, a federal court dismissed a case that the IRS was willing to settle on the First Amendment rights of churches to speak about timely political issues.
- Known as the Johnson Amendment, the ban on political speech has severely curtailed the freedom of speech for all nonprofit organizations (religious or otherwise) and allowed the IRS to abuse its authority during the Lois Learner and the Tea Party scandals.
- The tax code is unique in that it touches the lives of every person in America, and often contains substantive, non-revenue-raising provisions that control what Americans can say or do. But challenging these laws hidden in the tax code is impossible without reform of the Anti-Injunction Act and related statutes.
On March 31, 2026, a federal district court based in Tyler, Texas, rejected a deal between the IRS and the National Religious Broadcasters Association that would have curtailed the ban on nonprofit political speech. The court dismissed the case “without prejudice” (meaning it could be brought again) because it held that the Anti-Injunction Act and the Declaratory Injunction Act bar federal courts from hearing cases “in respect to” taxes, including challenges by nonprofit organizations.
This is another salvo in the battle to get judicial review of substantive laws, simply because Congress placed an item in the tax code instead of another area of the U.S. Code. Regardless of the merits of the lawsuit here, NTUF has long called for reforms that would allow taxpayers access to their day in court.
The Johnson Amendment’s Ban on Nonprofit Political Activity Has Long Been Under Fire.
Known as the Johnson Amendment, the Internal Revenue Code § 501(c)(3) bans churches and other nonprofits from engaging in political activity. Religious organizations and nonprofits have been unable to endorse or support candidates for political office without risking the loss of their tax-exempt status.
The law did not always have such a political speech ban. Then-Senator Lyndon B. Johnson introduced an amendment to the Revenue Act of 1954 that prohibited political activity by nonprofit organizations, which Congress adopted without comment, explanation, or legislative finding. General historical consensus is that the addition of the political activity prohibition was due to a protracted campaign against Johnson in churches in the Senator’s home state of Texas.
The ban on political activity has come under fire and there have been calls for its repeal. The Alliance Defending Freedom had a Pulpit Initiative and Pulpit Freedom Sunday throughout the 2010s as a way to highlight the issue. In his 2016 presidential campaign, Donald Trump criticized the Johnson Amendment and later called for its repeal in the 2017 National Prayer Breakfast. The House of Representatives version of the Tax Cuts and Jobs Act of 2017 repealed the Johnson Amendment, but the provision did not survive the Senate parliamentarian’s ruling that the provision violated the Byrd Rule for reconciliation legislation.
As the law currently stands, for tax-exempt organizations, what constitutes “political activity” is vitally important. If it runs afoul of the rules, the nonprofit loses its exempt status and the managers are subject to draconian fines (levied as “taxes” that are immediately due). The Internal Revenue Code does not define the full scope of the political activities ban. Worse, the Treasury Regulations employ an eleven-factor test to try to figure out what is and is not “political activity.” This complex test chills core First Amendment activity by exempt organizations and is unworkable for the IRS to apply in practice.
The IRS itself cannot apply these rules consistently or correctly. Ten years ago, Lois Lerner’s “Exempt Organizations” branch defaulted to key word searches and other arbitrary methods to enforce the political activity rules. The so-called “Tea Party” groups were the hardest hit with denial of tax exempt status, audits, and enforcement. The Treasury Department’s Inspector General for Tax Administration determined that Tea Party groups were unfairly targeted. The IRS uses criteria that can be applied inconsistently across different nonprofits for similar activity.
The Anti-Injunction Act Stopped the Latest First Amendment Challenge to the Johnson Amendment.
The National Religious Broadcasters, along with some churches, filed a lawsuit challenging the Johnson Amendment. They argued that the Johnson Amendment violated their First Amendment rights to freedom of speech and free exercise of religion, as well as other constitutional rights (the First Amendment was the main argument). The National Religious Broadcasters asked the court to enjoin the IRS from enforcing the Johnson Amendment.
In July 2025, the IRS entered into a consent decree with the plaintiffs. The IRS agreed that the Johnson Amendment, “as properly interpreted” does not prevent a “house of worship” from speaking “to its congregation, through customary channels of communication on matters of faith in connection with religious services, concerning electoral politics viewed through the lens of religious faith.”
But note that the consent decree in National Religious Broadcasters applies only to the plaintiffs in the case. (Many would expect that the IRS will likely apply the same rule to all similarly-situated nonprofits in the future.) And the consent decree focused only on speech delivered through customary channels to congregations on matters of faith, in connection with religious services, that concerns electoral politics viewed through the lens of religious faith. In other words, even under the consent decree, churches would not be able to run political ads on television, only speak about candidates’ positions and other political speech from the pulpit.
But the federal court rejected the consent decree. Relying principally on the Supreme Court’s 1974 decision in Bob Jones University v. Simon, the court held that the Anti-Injunction Act, 26 U.S.C. § 7421(a), stopped the case entirely. The Anti-Injunction Act (and a similar provision in the Declaratory Injunction Act, 28 U.S.C. § 2201(a)) broadly prohibit cases that “restrain the assessment, levy or collection of any tax”—even those that challenge tax laws that violate the Constitution. With no jurisdiction to hear the case, the federal district court could not approve the consent decree.
Now the group must find another way to get reform of the Johnson Amendment, when both the nonprofits and the IRS now agree that there are significant First Amendment concerns over the law as currently written and enforced. But, since this is not a challenge to a tax that is due, it is hard to take the typical route of “pay the tax, fight for a refund later.” There is no need to ask for a refund when the problem is one regulating activity rather than trying to collect revenue.
This Case Highlights the Need for Reform.
The tax code is unique in that it touches the lives of every person in America. The tax code also houses substantive policy beyond merely raising money for the government. The code encourages marriages, sponsors home ownership over renting, and was used to pass major policy provisions of the Affordable Care Act (Obamacare).
Even a challenge to Obamacare’s individual mandate only narrowly avoided an Anti-Injunction Act bar. In National Federation of Independent Business v. Sebelius, Chief Justice John Roberts needed to write an opinion that said the health insurance law was not a tax for Anti-Injunction Act purposes but was a tax pursuant to Congress’ taxing power that allowed a mandate that individuals buy health insurance.
As the National Religious Broadcasters found out, they cannot even challenge a restriction on their speech without overcoming the high hurdle of the Anti-Injunction Act. We provided a set of modest reforms to the ban on federal courts hearing tax-related challenges. We suggested that Congress could simply prohibit courts from “preliminarily or temporarily” stopping the collection of taxes under these laws. These minor edits to the Anti-Injunction Act, Declaratory Judgment Act, and Tax Injunction Act (applicable to challenges to state tax systems) would leave in place any attempt to delay payment of taxes via litigation, but allow for the federal courts to still hear the challenges like those of the National Religious Broadcasters. In other words, the government would get every chance to defend the law while still collecting any applicable tax revenue while the case was pending, but the AIA and related laws would no longer be a trump card to stop challenges.
Everyone should get their day in court, especially against such a strong adversary as the IRS. Congress should not make a law unassailable simply by putting it into the tax code instead of regulating the activity elsewhere.