So here's a fun tax law puzzle: What happens when the IRS tries to settle a case about whether churches can endorse political candidates? A federal judge says: "Not so fast—I can't even rule on this."
In a ruling issued Tuesday, U.S. District Judge J. Campbell Barker in Tyler, Texas, rejected a proposed settlement between the Internal Revenue Service and two Texas churches, plus the National Religious Broadcasters. The deal would have effectively allowed churches to endorse political candidates without risking their tax-exempt status. But Judge Barker said he lacked jurisdiction to approve it, citing the Tax Anti-Injunction Act—a law that prevents courts from ruling on matters that could directly affect tax collection.
Think of it this way: The IRS was ready to make peace, but the judge said, "Sorry, I'm not allowed to bless this arrangement."
The July settlement aimed to create an exemption for routine religious communications from the Johnson Amendment, that 1954 tax code provision that bars nonprofits—both religious and secular—from endorsing political candidates. For decades, this has been the rule: If you want tax-exempt status, you stay out of partisan politics. The settlement would have carved out a big exception for churches, but now it's back to business as usual.
The IRS didn't immediately respond to requests for comment.
Tax Season in Full Swing
This all comes during peak filing season, when the IRS is already plenty busy. Through March 20, average refunds have climbed 10.9% to $3,571 from $3,221 a year earlier. Total refunds have topped $202 billion, with nearly 57.3 million direct deposits—that's up 6.5% year-over-year. The filing deadline, as always, remains April 15.
But here's the catch: The agency is doing all this with significantly fewer people. IRS staffing has fallen roughly 26% to about 75,700 employees from over 102,000, following buyouts and layoffs. National Taxpayer Advocate Erin Collins has warned that the reduced headcount, combined with significant tax law changes, poses real risks to the filing season. Fewer people, more money, same deadline—what could go wrong?
Scams Rise Amid Growing Refunds
Speaking of what could go wrong: Higher refunds have drawn more fraudsters. A McAfee survey found 23% of Americans reported losing money to tax scams, averaging $1,020 per victim. Young adults aged 18–24 were most at risk, with 42% reporting at least one scam encounter.
The IRS has flagged its annual "Dirty Dozen" scams, which now include AI-generated calls, phishing, and fake charities. The advice? Get an Identity Protection PIN and verify communications only through official IRS channels. Because when there's more money floating around, the scammers get more creative.
So where does this leave churches and politics? For now, exactly where they were: Churches can't endorse candidates without risking their tax-exempt status. The IRS tried to change that through a settlement, but a judge said he couldn't approve it. Sometimes in tax law, the answer isn't "yes" or "no"—it's "I'm not allowed to answer that question."
