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Nonprofit Advisory: Executive order on “Promoting Free Speech and Religious Liberty”

President Donald Trump signed an executive order Thursday that impacts a provision in the U.S. tax code commonly known as the Johnson Amendment.

The Johnson Amendment prohibits all section 501(c)(3) organizations from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office.

Trump’s executive order on “Promoting Free Speech and Religious Liberty” directs that “the Secretary of the Treasury shall ensure, to the extent permitted by law, that the Department of the Treasury does not take any adverse action against any individual, house of worship, or other religious organization on the basis that such individual or organization speaks or has spoken about moral or political issues 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 on behalf of (or in opposition to) a candidate for public office by the Department of the Treasury.”

The order states that the term “adverse action” refers to “the imposition of any tax or tax penalty; the delay or denial of tax-exempt status; the disallowance of tax deductions for contributions made to entities exempted from taxation under section 501(c)(3) of title 26, United States Code; or any other action that makes unavailable or denies any tax deduction, exemption, credit, or benefit.”

HoganTaylor is monitoring this development and will keep you informed as the order is implemented.