Houses of worship have been involved in America's political process since our nation's birth, and they will continue to play an important and increasing role in our society's evolution. The nation's courts and laws have upheld the rights of religious entities--and all charitable organizations--to participate in the political process, while simultaneously upholding the separation of Church and State. However, organizations and the courts continue to wrangle with questions regarding the exact nature and scope of political activity in which houses of worship may participate. Attention to this issue has increased greatly through introduction of H.R. 235, the Houses of Worship Political Speech Protection Act, sponsored by U.S. Representative Walter B. Jones (R-NC). The legislation would allow tax-exempt houses of worship to intervene directly in partisan political campaigns by endorsing and opposing candidates for public office. Jones and other proponents of the bill argue that the free speech of clergy is stifled by the absolute prohibition on partisan electioneering. However, the IRS already permits churches and other nonprofit organizations to engage in issue advocacy on any issue they wish. Church and state must remain separate from one another to ensure religious freedom and societal plurism. History of the 501(c)(3) Political Activity Prohibition Senator Lyndon Baines Johnson Amendment Religious, charitable, educational and scientific organizations have been tax-exempt since 1913, although no political activity parameters were included in the first exemption statues. In 1954, however, Senator Lyndon Baines Johnson (D-TX) added the "express prohibition" on political campaign activity—without the benefit of hearings, testimony, or comment from affected organizations during Senate floor debate on the Internal Revenue Code. The amendment prohibits 501(c)(3) organizations from "participat[ing] in, or intervening in any political campaign on behalf of any candidate for public office." The law was eventually applied to churches and now includes all 501(c)(3) organizations. The genesis of Johnson's desire to reduce 501(c)(3) participation in elections reportedly stems from the great effect nonprofits had in campaigning against him, "by producing Red-baiting radio shows, television programs and millions of pieces of literature”; however, committee records demonstrate a general congressional mood towards increased regulation of nonprofit speech. In 1952, the House formed the House Select Committee to Investigate Tax-Exempt Foundations and Comparable Organizations, which was chaired by Representative Eugene E. Cox (R-GA) (Cox Committee). The Cox Committee was formed to determine "whether foundations have been infiltrated by communists, as well as whether tax-exempt groups are using their money for stated purposes and are not endangering our existing capitalistic structure." The Cox Committee determined that foundations had not been directly involved in subversion, but noted that they were in fact vulnerable to such influence. Accordingly, the committee recommended that foundations provide more information to the IRS as part of their annual returns. The House created a second Special Committee to Investigate Tax-Exempt Foundations and Comparable Organizations. The committee was directed to conduct a full and complete investigation of educational and philanthropic foundations and other comparable tax-exempt organizations to determine if any foundations or organizations were using their resources for purposes other than the purposes for which they were established. The committee found that there was a "rapidly increasing birth rate of foundations" and went on to observe that there was little implementation of their responsibility to the general welfare. The committee concluded that foundations administer their resources with such freedom that they bordered at times on irresponsibility. The committee further observed that the current laws did not compel compliance. The committee's found that foundations were becoming too powerful. Specifically, the committee noted that foundations could exercise "thought control" and through this could "materially influence public opinion." It noted that where there were tax laws in place to curtail any political activity of foundations, the "present rule, as interpreted by the courts, permits far too much license." The Committee recommended a reexamining of tax law regarding the prohibition of political activity. They recognized that it was extremely difficult to draw the line between what should be permissible and what should not, but advocated for the complete exclusion of political activity, leaving it to the courts to apply a de minimis standard. Consequently. when Senator Johnson proposed his amendment on June 2, 1954, it was adopted without hearings or testimony. Both sides of the political fence were concerned regarding potential of non-profit groups to wield political power. The Committee urged the continued inquiry into the political activity of nonprofits, including churches. They stated in the Committee report, "The right of a minister, priest or rabbi to engage in political activity is clear enough. When such activity takes place, however, under the shelter of a tax-exempt organization which is not in itself a church, we question its permissibility". There has been very little legislation and few court decisions of this amendment. The provision has been described as the quid pro quo for exempt status. The Court of Appeals for the Second Circuit has stated the following: "The trade-off for the benefit of this exemption is that no substantial part of the organization's activities may include "carrying on . . . propaganda, or otherwise attempting, to influence legislation . . . [nor may it] participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office." Thus the quid pro quo for § 501(c)(3) tax exemption *56 is a restraint on an organization's right to try to influence the political process. This limitation has been held constitutional. At one point in the recent past, Congress thought the provisions against political activity were not strong enough. As part of the Omnibus Budget Reconciliation Act of 1987, Congress added several provisions that clarified the prohibition against political activities by non-profit organizations. Two provisions were added. The first provision was a clarification that the law forbade both endorsing candidates and opposing candidates. The other provision added § 4955, an excise tax on any private foundation that expends money "to influence the outcome of any specific public election or to carry on any voter registration drive (except for nonpartisan voter registration drives meeting specified requirements), or for any other noncharitable purpose." Congress also passed two other provisions which, in addition to the penalties described above, may be applied either in addition to or as an alternative to the revocation of a tax-exempt entity's exempt status. Section 6852, "Termination Assessments in Case of Flagrant Political Expenditures of § 501(c)(3) Organizations" provides for the immediate assessment of tax on any § 501(c)(3) organization that makes expenditures that are "a flagrant violation of the prohibition against making political expenditures." Additionally, § 7409 allows the government to obtain an injunction prohibiting any § 501(c)(3) organization from making any further political expenditures, "to ensure that the assets of such organization are preserved for charitable or other purposes specified in § 501(c)(3)." The impetus for the 1987 legislation was provided by the following two events: [8j]First, in 1986, an organization then exempt under IRC 501(c)(3), the National Endowment for the Preservation of Liberty, was reported to have intervened in Congressional campaigns, opposing the reelection of members who had not supported aid to the Nicaraguan Contras. Second, questions had been raised about the use of ostensibly educational IRC 501(c)(3) organizations by politicians to promote their candidacy or potential candidacy. The wording of the House Report that accompanied the 1987 legislation is strong and unequivocal. The House noted that, as in the case of similar legislation added in 1969, the Service may have been reluctant to revoke a tax-exempt entity's status "in circumstances where that penalty may seem disproportionate" to the offense. Members of the House committee felt very strongly about prohibiting political activity by tax-exempt organizations, as is reflected by the following passage: The prohibition on political campaign activities and the restrictions on lobbying activities by charities reflect Congressional policies and that the U.S. Treasury should be neutral in political affairs, and that substantial activities directed to attempts to influence legislation should not be subsidized through the tax benefits accorded to charitable organizations and their contributors. To carry out the objectives of the Congress as reflected in these long-standing rules, the committee intends that the Internal Revenue Service should strengthen its enforcement efforts and should report periodically to the committee on its augmented enforcement efforts. In this connection, the committee also concluded that there should be greater coordination between the Internal Revenue Service and the Federal Election Commission for purposes of assuring that the assets of tax-exempt charities are not being diverted to prohibited political purposes. On March 12 and 13, 1987, the Subcommittee on Oversight of the Committee on Ways and Means in the House of Representatives held hearings concerning the lobbying and political activities of tax-exempt organizations. The hearings were chaired by Congressman J.J. Pickle, Chairman of the House Ways and Means Subcommittee on Oversight. The hearings reinforced the prohibition on political activities. However, the United States Catholic Conference (USCC) submitted a statement to the committee that challenged the IRS' interpretation of the prohibition. Under the USCC's analysis, "the proper construction of the political campaign activity is that charitable organizations are prohibited from taking part in a political campaign only when specifically representing, acting in the interest of, or for the benefit of, a candidate for public office.", meaning the IRS' interpretation of the prohibition infringed on its right to the free exercise of religion. Tax-exempt entities, were forced to choose between their tax-exempt status and their obligation to "address the moral and religious dimensions of issues facing this society." However, Congress decided that the rules prohibiting political activity should not only stand, but also become tougher. They subsequently passed new penalties on tax-exempt organizations that participate in political activities. Impetus for the Houses of Worship Act This issue continues to be debated in Congress. Proponents of the Houses of Worship Act state that the bill would restore houses' of worship First Amendment rights, and point to what they see as partisan grounds for the prohibition. Conservative leaders point to a New York churches loss of tax-exempt status due to an attack on Bill Clinton during the 1992 an example of a selective enforcement of the political activity of conservative churches. On October 30, 1992, four days before the presidential election, the Church at Pierce Creek (Pierce Creek), which is based in Binghamton, New York, decided to run full-page advertisements in USA Today and the Washington Times warning Christians not to vote for then-Governor Clinton. The advertisements warned that Clinton's positions concerning "abortion, homosexuality, and the distribution of condoms to teenagers in schools violated Biblical precepts." The "reasonable belief" that the IRS had for pursuing a full-scale investigation against Pierce Creek were the words listed at the bottom of each advertisement: "This advertisement was co-sponsored by the Church at Pierce Creek . . . and by churches and concerned Christians nationwide. Tax deductible donations for this advertisement gladly accepted. Make donations payable to: The Church at Pierce Creek. [mailing address]." The Court of Appeals rejected Pierce Creek's free-exercise and selective-prosecution claims under the First and Fifth Amendments, respectively. To support its selective prosecution claim, Pierce Creek provided several hundred pages of newspaper excerpts reporting political campaign activities in, or by pastors of, other churches that retained their tax-exempt status. The Court distinguished Pierce Creek's activities because "[n]one of the reported activities [by the other churches] involved the placement of advertisements in newspapers with nationwide circulations opposing a candidate and soliciting tax deductible contributions to defray their cost." Although the Supreme Court has not ruled on the constitutionality of the political activity prohibition itself, the amendment has been interpreted broadly to include a range of activity. The most far-reaching decision is that of the Tenth Circuit in Christian Echoes National Ministry, Inc. v. United States. The IRS had revoked the tax-exempt status of a politically conservative organization in part because the group, through its religious broadcasts and publications, had attacked liberal politicians and urged followers to support conservative ones instead. The court noted governmental interests "in keeping church and state separate and in preserving the neutrality of the Treasury Department with respect to political affairs." The Court characterized the government's interest in church-state separation in this context as "overwhelming and compelling." Along similarly restrictive lines, a church may not make statements that directly support or oppose a candidate or slate of candidates in a "sermon, church bulletin, on a church website or in an editorial in a church publication." In addition, churches may not indirectly support or oppose any candidates by characterizing candidates with anti-family or similar labels, using plus (+) and minus (-) signs, or other indications of candidates' agreement--or lack thereof--with the church's positions on particular issues. The bottom line is that § 501(c)(3) prohibits charities-- including houses of worship--from endorsing or opposing candidates "either expressly or by implication." However, this does not mean that church leaders are not permitted to voice their opinions regarding important sociopolitical matters that could have profound impact on their congregations. Charitable organizations may engage in activities that "focus on giving voters and candidates access to each other on an impartial basis, i.e., access to and by all the candidates and not merely those favored by the organization's leaders." The IRS has also ruled that materials that survey all candidates in a given contest on a wide array of issues, and express neither approval nor disapproval of any individual do not constitute campaign intervention. Church leaders have always been free to speak out on moral and ethical issues at stake in pending legislation or public referenda. They may take stands on political issues such as abortion, gay rights, gun control, and health care, to name a few. In addition, it naturally follows from the prohibition that church leaders may directly support or oppose a candidate for non-elective public office, e.g., a Supreme Court Justice, without jeopardizing the church's tax-exempt status. The prohibition on political campaign activities applies only to § 501(c)(3) organizations, not to the activities of individuals acting in their private capacities. Thus, it follows that that the prohibition does not prevent a church leader from being involved in a political campaign, so long as the leader "does not use the church's financial resources, facilities, or personnel, and clearly indicates that his or her actions or statements are his or her own, and not those of the organization." The Houses of Worship Act and Current State of Affairs The prohibition on campaign intervention has brought 501(c)(3) organizations under increasing scrutiny. In a recent letter to Congress, IRS Commissioner Mark Everson reported that the IRS has seen an increase in the political activity of tax-exempt organizations during the last election. "Each election cycle we become involved with significant allegations of wrongdoing and this problem shows no indication of abating. In 2002, a midterm election year, our records indicate that we received approximately 70 complaints alleging campaign activity by charities. In 2004, a presidential election year, that number was over 200." The current prohibition on partisan activity protects the integrity of charitable nonprofits by preventing individuals from using tax-deductible contributions to avoid campaign finance laws. It also prevents individuals from using charitable nonprofit organizations, which by definition are organized for public purposes, to advance their personal partisan political views. Some members of Congress would like to open up religious organizations to campaign contributions and activity. Rep. Walter Jones (R-NC) has introduced a bill, H.R. 235, The Houses of Worship Restoration Act, that allow houses of worship to engage in political campaigns in support of or in opposition to candidates for public office. H.R. 235 would not rectify discrepancies in the tax code, it would fundamentally alter the meaning of politicking from the pulpit in churches across America. Mixing religion and partisan politics could lead to religious divisiveness. Under the Jones legislation, a large church, or a number of churches working together, could form a political machine. Religious groups could select candidates and support their campaigns. This would inevitably allow the largest denomination in each community to dominate political life. (For a more detailed analysis of HR235 click here.) Organizations classified as 501(c)(3) receive a tax exemption because their work is educational, religious or charitable, and benefits society as a whole. However, political parties and candidates could abuse the church's tax-exempt status and give generous sums of money to houses of worship, write off the donations as tax-deductible, then have the churches do political work on their behalf, essentially making churches part of a campaign money-laundering scheme. Additionally, allowing churches to engage in partisan politics results in undue preference for religious speech. The Jones legislation would give religious organizations the right to engage in activities that would remain prohibited for secular 501(c)(3) groups. Both types of groups receive tax-deductible donations, which costs the national treasury. Taxpayers should not be required to fund partisan activities.