The Trump Executive Order and IRS Politics

May 9, 2017
posted by Bob Bauer

President Trump’s Executive Order to relieve religious organizations of regulatory limits on their political activities came and went with little stir. It was widely seem to be lacking in content. David French, writing in The National Review, was harsher, pronouncing it “worse than useless.”

Aimed at the Johnson Amendment, the Order directs the Secretary of the Treasury not to take “any adverse action” against a 501(c) organization speaking on political issues “from a religious perspective.” But commentators correctly observed that an Executive Order cannot undo a statute, and that the Order confines its directives to actions by the Secretary “to the extent permitted by law” or “consistent with law.” Translated into its simplest terms, the Order requires the Secretary to do what he can if the law allows it, and because the law in question is the Johnson Amendment, then the President has, in effect, demanded that the Secretary ease restrictions “to the extent permitted” by the Johnson Amendment. This is an unusual way of taking on the Amendment.

But if we look beyond the murky conception behind the Order and its somewhat tortuous wording, and consider what it might mean in practice, then it seems more consequential–at least in the next four years.

As David French notes, and as anyone in the frustrated reform community will gladly affirm, the IRS has rarely enforced these restrictions. It has not wanted a battle with the churches. The Order serves to convert IRS’ inaction into formal policy. The Secretary is required to take no “adverse action against political speech “from a religious perspective”–

 Where speech of similar character has, consistent with law, not ordinarily been treated as participation or intervention in a political campaign… by the Department of the Treasury.


Of course, the IRS would defend its non-enforcement posture as “consistent with law”: how could it say otherwise? The agency would claim to have discretion to pass or act on a case, depending on the specific facts. But that means the agency could more consistently take action, resuming active enforcement. This Order cuts off that possibility. Note the use of “ordinarily”: the agency might but does not “ordinarily” enforce the restrictions, and this is deemed consistent with law. The Order then provides that the Secretary should make this “ordinary” non-enforcement the standing policy, disallowing deviation from it.

French is right, of course, that this does not change the statute: the Johnson Amendment remains. But for the next few years at least, a (c) organization is not merely taking advantage of agency discretionary restraint in the application of the Amendment’s political restrictions. Now the IRS will operate under an Executive Order that ends that discretion and establishes a controlling interpretation based on the agency’s quiescence of past years. For the time being, this does make a legal difference to this kind of political spending–at least through the President’s re-election campaign.

This is the other notable aspect of the Order. A President has sought to exercise executive authority to affect the administration of the tax code in matters involving his own political interests. Normally it is thought wise to keep partisan politics out of running of the IRS: the Republicans have had a lot to say about this. No doubt they will say that this latest presidential act is different: it is about religious liberty. But it cannot go unnoticed that the president and others in his party are also addressing a demand from an important political constituency, and that they could not have overlooked the potential political benefit to them–in grateful allies and supportive expenditures–from satisfying that demand.

And Mr. Trump has done so while leaving the Johnson Amendment in place, inviting more conflict in the future. It seems simpler to keep partisan politics out of the administration of the tax laws by taking the IRS out of the business of regulating politics.

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