A recent federal court decision has drawn attention from nonprofit and policy communities across the country. While some expected a major ruling on the Johnson Amendment (which prohibits nonprofits and religious organizations from participating in political campaigns), the court took a different approach. Instead of considering whether the law is constitutional or not, they focused on when it can be challenged.

Below is a more in-depth analysis of the case, the court’s decision, and what the future holds. In short, the court ruled along technical, procedural lines that it could not yet hear the case, preserving the Johnson Amendment for the time being. However, there remain questions about future attempts to weaken the Johnson Amendment, either through the courts or federal government action. There is a window for state governments to act to reinforce these principles.

Background: The Johnson Amendment and the Case

The Johnson Amendment is a provision in federal tax law that applies to organizations with 501(c)(3) status, including most nonprofits and houses of worship. It requires that these organizations do not participate or intervene in political campaigns for or against candidates for public office if they want to keep their tax-exempt status. In practice, this means nonprofits can engage in issue advocacy and limited lobbying but cannot endorse or oppose political candidates. Enforcement is tied to tax consequences, most notably, the potential loss of tax-exempt status or other penalties.

In National Religious Broadcasters v. Bessent, a group of religious nonprofits and broadcasters challenged the Johnson Amendment, arguing that it restricts their free speech and religious exercise. Rather than waiting for the IRS to act against them, they asked the court to block enforcement ahead of time. The federal government, somewhat unusually, agreed to resolve the case through a consent judgment.

A consent judgment (sometimes called a consent decree) is a legal agreement between the parties in a lawsuit that is approved and entered by a court. Instead of continuing to litigate and having a judge decide the outcome, both sides agree on a resolution and ask the court to make it official.

The Case, in Plain Terms

The organizations that brought the case argued that the Johnson Amendment limits their free speech. They asked the court to step in before the IRS took any action against them.

This type of request is called a pre-enforcement challenge. In simple terms, it means asking a court to block a law before it is enforced.

The court said no. Instead, it dismissed the case, saying it did not have the authority to hear it at this stage, citing both the Tax Anti-Injunction Act (AIA) and the Declaratory Judgment Act (DJA), both of which generally prohibit courts from intervening in federal tax matters before the government has actually assessed or collected a tax, meaning challenges like this must wait until there is a concrete enforcement action.

Why the Court Didn’t Decide the Bigger Question

Rather than weighing in on the constitutionality of the Johnson Amendment, the court stopped at a threshold issue: whether it was allowed to hear the case at all. Courts are required to resolve these procedural questions first, before reaching the merits of a dispute.

Because the case was brought before any enforcement action had occurred, the court determined it was not the right vehicle to address the broader constitutional issues. As a result, questions about free speech, religious exercise, and the validity of the Johnson Amendment remain unresolved, and will need to be addressed in a future case with a more developed factual record.

Looking Ahead

This decision does not resolve the broader debate over nonprofit political activity. It simply postpones it. Any major constitutional ruling on the Johnson Amendment will likely come later, in a case where enforcement has already occurred.

For now, the takeaway is straightforward: The future of nonprofit advocacy will continue to be shaped more by policy decisions than by immediate court rulings. At the same time, this creates an important window for states to act. While a federal court ruling striking down the Johnson Amendment would override state-level approaches, courts have consistently upheld the government’s ability to condition tax-exempt status on limits to political campaign activity.

However, efforts to weaken the Johnson Amendment, whether through legislative changes or attempts at non-enforcement, such as consent judgments, remain a real possibility. As a result, thoughtful state policy can play a role in reinforcing essential principles surrounding nonprofit political activity and maintaining public trust in the sector.