WASHINGTON — While much attention has been focused on the Supreme Court’s hearing on the birthright citizenship challenge by the Trump Administration, a federal court has declined to approve a proposed settlement that could have reshaped how religious organizations engage in partisan politics, dismissing a closely watched case involving the Johnson Amendment and leaving its future uncertain.
The ruling, issued by U.S. District Judge J. Campbell Barker, throws out a proposed settlement between the Internal Revenue Service and a coalition of religious broadcasters and churches. That settlement had suggested a significant reinterpretation of the Johnson Amendment, potentially allowing churches, in the context of religious services, to express support for political candidates without triggering enforcement that could jeopardize their tax-exempt status.
Instead, the court dismissed the case without prejudice, not on constitutional grounds, but because it lacked jurisdiction to hear the dispute at all. In effect, the court held that because the Johnson Amendment operates through the tax code, it can only be challenged through established tax procedures, not through preemptive constitutional claims.
Image credit: Blogtrepreneur – CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=50979400
As previously reported by The Wild Hunt, the lawsuit, brought by groups including the National Religious Broadcasters, argued that the Johnson Amendment violates protections for free speech and religious exercise. The plaintiffs also raised claims under the Fifth Amendment and the Religious Freedom Restoration Act.
At the center of the case was a proposed consent judgment, jointly submitted by the plaintiffs and the IRS under a new federal administration. The agreement asserted that political speech delivered in the context of religious services should not be treated as a prohibited campaign intervention.
Such a reinterpretation would have created a functional carve-out for houses of worship, one that critics argued could transform churches into de facto political actors while retaining their tax-exempt status.
For months, conservative advocacy groups signaled that a favorable ruling could open the door to widespread political endorsements from pulpits ahead of future elections. Some had already begun organizing clergy networks in anticipation.
Judge Barker’s decision, however, sidestepped those broader constitutional questions entirely. Instead, the court focused on a technical but decisive issue: whether it had the authority to approve the settlement or grant the requested relief.
The judge concluded that the court did not.
The court found that the case was barred by the Tax Anti-Injunction Act and the tax exception within the Declaratory Judgment Act. These statutes prohibit federal courts from issuing rulings that would restrain the assessment or collection of taxes.
Because the Johnson Amendment is embedded within the tax code, specifically as a condition of maintaining 501(c)(3) status, any attempt to block its enforcement would necessarily interfere with federal tax administration.
Critically, the court rejected the argument that a negotiated settlement could overcome these jurisdictional limits. Even if both parties agreed to the outcome, Judge Barker emphasized, federal courts cannot exercise authority they do not possess.
He also declined to apply a narrow exception that allows pre-enforcement challenges in rare circumstances, finding that the plaintiffs had not demonstrated either certain success on the merits or irreparable harm.
Finally, the court noted that alternative legal pathways remain available, such as bringing a tax refund suit after enforcement or seeking declaratory relief following an IRS determination.
Judgement (XX) Pamela Colman Smith, Public domain, via Wikimedia Commons
Advocates for church-state separation welcomed the decision. Rachel Laser, president and CEO of Americans United for the Separation of Church and State called it a “major legal victory,” arguing that the proposed settlement would have undermined longstanding safeguards by allowing religious institutions to function as “unaccountable political action committees.”
Similarly, nonprofit sector leaders emphasized the importance of maintaining political neutrality within charitable organizations. Diana Yentel of the National Council of Nonprofits stated that the ruling preserves public trust and prevents partisan influence from distorting nonprofit missions.
Conservative religious groups expressed frustration. Tony Perkins criticized the decision as a missed opportunity to correct what he described as a longstanding infringement on religious liberty.
Attorneys for the plaintiffs have indicated that an appeal is likely, potentially setting the stage for review by the United States Court of Appeals for the Fifth Circuit, and possibly, eventually, the Supreme Court.
Despite the dismissal, the case leaves unresolved tensions surrounding the Johnson Amendment’s enforcement.
In recent years, critics and plaintiffs have argued that the IRS has enforced the provision inconsistently, particularly in cases involving houses of worship. Plaintiffs in the case argued that the amendment has rarely been applied to sermons or religious speech, contributing to uncertainty about its practical scope.
The now-rejected settlement would have formalized a more permissive interpretation, at least for religious services. Its collapse returns the legal landscape to its prior ambiguity: the Johnson Amendment remains in force and unchanged, but questions about how, and whether, it will be enforced persist.
For Pagan religious groups, charities, and other minority faith communities, this uncertainty carries particular weight.
Unlike large, well-resourced religious institutions, smaller or less politically connected groups may face greater risks if enforcement becomes uneven or selectively applied. At the same time, any erosion of the Johnson Amendment could expose nonprofit religious spaces to increased partisan pressure, potentially reshaping community dynamics and expectations.
The broader concern, as articulated by a coalition of more than 1,800 nonprofits earlier this year, is that weakening the amendment could invite political interests into spaces historically oriented toward service, spirituality, and community care—altering both their function and public perception.
For now, the Johnson Amendment remains intact, and the court’s decision reinforces the procedural barriers to challenging it outside established tax-law frameworks.
But the underlying constitutional questions about free speech, religious liberty, and the boundaries between church and state remain unresolved.
The core takeaway remains, however. The ruling reinforces a longstanding principle of federal tax law: challenges to tax provisions generally must occur after enforcement, not in anticipation of it.
If the case proceeds on appeal, it could still become a vehicle for those issues to be addressed at higher levels of the federal judiciary.
Until then, religious organizations are left navigating a familiar but unsettled terrain: a law that is clear in text, uneven in enforcement, and increasingly central to broader debates about religion and political power in the United States.
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