Court Rejects Proposed Settlement to Gut Johnson Amendment

Ruling cites tax law restrictions on court's ability to interfere in tax matters.

Apr. 2, 2026 at 1:39pm

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A federal district court has rejected a proposed consent agreement between religious organizations and the IRS that would have significantly weakened the Johnson Amendment, a provision in the tax code that prohibits tax-exempt organizations from participating in political campaigns. The court dismissed the lawsuit, ruling that federal law prohibits it from interfering in matters of tax assessment.

Why it matters

The Johnson Amendment has long been a point of contention between religious groups and the government. This ruling upholds the existing law, which is intended to prevent tax-exempt organizations from becoming conduits for partisan politics and maintain the separation of church and state.

The details

National Religious Broadcasters, Intercessors for America, and two churches filed a lawsuit against the IRS in 2024, arguing that the Johnson Amendment violates their First Amendment rights. The IRS initially sought to dismiss the suit, but the Trump administration IRS later changed course and filed a joint motion with the plaintiffs for a consent judgment that would have exempted houses of worship from the Johnson Amendment's restrictions on political speech. However, more than 1,800 nonprofits opposed the proposed settlement, fearing it would subject houses of worship to intense political pressure.

  • The lawsuit was filed in 2024, during the Biden administration.
  • The IRS filed the joint motion for a consent judgment in July 2025, during the Trump administration.
  • The court rejected the proposed settlement on March 31, 2026.

The players

National Religious Broadcasters

One of the plaintiffs that filed the lawsuit against the IRS, arguing the Johnson Amendment violates their First Amendment rights.

Intercessors for America

One of the plaintiffs that filed the lawsuit against the IRS, arguing the Johnson Amendment violates their First Amendment rights.

Judge J. Campbell Barker

The district court judge who rejected the proposed settlement, ruling that federal law prohibits the court from interfering in matters of tax assessment.

Guthrie Graves-Fitzsimmons

A representative of the Interfaith Alliance, who called the court's decision "a victory for houses of worship, for our elections, and for the healthy boundaries between religion and government."

Americans United for Separation of Church and State

A nonprofit organization that opposed the proposed settlement, fearing it would subject houses of worship to intense political pressure.

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What they’re saying

“The proposed settlement would have opened the floodgates to dark money operations, allowing political operatives to funnel resources through churches while benefiting from generous tax exemptions at the expense of ordinary taxpayers and the integrity of our elections.”

— Guthrie Graves-Fitzsimmons, Representative, Interfaith Alliance

“Faith leaders can and should speak powerfully on the great moral issues of our time, but endorsing political candidates from the pulpit is a different matter entirely. It is corrosive to congregations, to communities, and to democracy itself.”

— Guthrie Graves-Fitzsimmons, Representative, Interfaith Alliance

What’s next

The court's dismissal of the case does not rule on the underlying constitutional claims against the Johnson Amendment. Organizations may still have other legal avenues to challenge the law, such as filing a refund suit or a pre-tax declaratory judgment action.

The takeaway

This ruling upholds the Johnson Amendment, which is intended to maintain the separation of church and state and prevent tax-exempt organizations from becoming conduits for partisan politics. It is a victory for those who believe the law is crucial for preserving the integrity of both religious institutions and the electoral process.