The Internal Revenue Service recently turned heads in the nonprofit sector when it appeared to revise its view of a law that generally prohibits 501(c)(3) organizations from engaging in partisan political campaign activity. The agency told a federal court that churches and other houses of worship do not run afoul of rule—the “Johnson Amendment” (named for President Lyndon B. Johnson)–when discussing electoral politics through their usual religious service communications channels.

This new IRS position came to light in the context of a joint legal motion made on July 7 in hopes of settling a lawsuit filed against the agency by National Religious Broadcasters, Intercessors for America, and two Texas churches. In their filing, the agency and the plaintiffs compared such faith-based communications between a church and its congregation to “a family discussion concerning candidates.”

“Thus, communications from a house of worship to its congregation in connection with religious services through its usual channels of communication on matters of faith do not run afoul of the Johnson Amendment as properly interpreted,” they said.

The joint filing also suggested a religious liberty reason for this newly stated position. The IRS and the plaintiffs said that for many houses of worship guidance on electoral politics is part of their religious exercise, so “interpreting the Johnson Amendment to reach such communications would create serious tension with the First Amendment’s Establishment Clause” by treating some religions more favorably than others.

Notably, Mike Batts, Managing Partner of BMWL, pointed out that this new IRS position “contradicts decades of IRS commentary and published guidance on the topic.”

“This new court filing by the IRS is sure to send shockwaves through the legal system as its implications are analyzed and vetted in the coming days,” Batts said. “If the filing truly represents an embodiment of new IRS policy in this controversial area of tax law, the IRS will need to revoke and/or amend quite a significant amount of its published guidance on the topic.”

ECFA will continue to carefully monitor developments related to the Johnson Amendment at the IRS, in the courts, and on Capitol Hill.