A JUDGE in Texas has dismissed a proposed agreement that would have allowed churches in the United States to endorse political candidates without losing their tax-exempt status.

Judge Campbell Barker, of the US District Court for the Eastern District of Texas, dismissed a long-running lawsuit filed by the National Religious Broadcasters (NRB) and two Texas Baptist churches, and rejected a proposed settlement, saying that the court had no authority to approve the agreement.

The lawsuit put forward by the NRB and the two churches challenged the Johnson Amendment, passed in 1954, which prohibited churches and other tax-exempt organisations from endorsing political candidates. Churches that were found to do so could be stripped of their tax-exempt status, though this has been enforced only once.

Conservative-leaning churches had long sought to challenge the amendment, and President Trump has also criticised it.

The plaintiffs in the case argued that the amendment violated their First Amendment rights.

Last year, the Internal Revenue Service set out a new approach to the law, saying that it considered communications between a leader of a house of worship and a congregation akin to “family discussion concerning candidates”, paving the way for endorsements to occur (News,18 July 2025).

The new IRS policy paved the way for a “consent judgment”, which had to be approved by a judge before the lawsuit could be formally resolved.

Judge Barker, however, said that he did not have the authority to approve the proposed settlement, referring to federal laws that prevent judges from blocking taxation that has not yet occurred.

His ruling said there was a simple solution for churches that wanted to avoid being penalised: “Put differently, if the plaintiffs here gave up their 501(c)(3) tax-exempt status, none of the harms they allege could occur.”

The NRB has said it will appeal against the ruling, as churches are forced “to engage in self-censorship because of the Johnson Amendment’s impact on their First Amendment freedoms.

“The plaintiffs here have no other forum to challenge the free speech restrictions imposed by the Johnson Amendment’s limitation on the right of nonprofits to speak about candidates, unless they first violate the law and then become subject to IRS enforcement action. No person should be forced to place themselves in legal jeopardy to protect their constitutional rights.”

The advocacy group Americans United for Separation of Church and State celebrated the ruling. “We’re glad that the Johnson Amendment will remain a strong bulwark to stop religious extremists from exploiting houses of worship,” the group’s president, Rachel Laser, said. “The proposed settlement agreement to exempt only houses of worship and not secular nonprofits would have been unfair and a violation of church-state separation.”

Several bishops in the Episcopal Church have issued their own guidance to clergy in the wake of the IRS policy change, asking them to refrain from endorsing candidates or political parties; the Bishop of Oklahoma, the Rt Revd Poulson Reed, warned that doing so “takes us down an unsteady and perilous path”.