Yes, churches have an exemption from paying taxes because of the First Amendment, not because of Section 501(c)(3). Section 501(c)(3) simply recognizes the pre-existing constitutional exemption.
But ever since the Johnson amendments banning politics from the pulpit, the lefties have been arguing that exemption from paying tax is simply a matter of legislative grace, and can be conditioned by controls over the churches.
The Internal Revenue Service website elaborates upon this prohibition as follows:
Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited 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. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.
Certain activities or expenditures may not be prohibited depending on the facts and circumstances. For example, certain voter education activities (including presenting public forums and publishing voter education guides) conducted in a non-partisan manner do not constitute prohibited political campaign activity. In addition, other activities intended to encourage people to participate in the electoral process, such as voter registration and get-out-the-vote drives, would not be prohibited political campaign activity if conducted in a non-partisan manner.
On the other hand, voter education or registration activities with evidence of bias that (a) would favor one candidate over another; (b) oppose a candidate in some manner; or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention.
The Internal Revenue Service provides resources to exempt organizations and the public to help them understand the prohibition. As part of its examination program, the IRS also monitors whether organizations are complying with the prohibition.
How the HELL did this ever become 'LAW' to begin with??
We managed to do ok from 1776 until 1954 withOUT it!!
Heck; the IRS wasn't even around until 1862!!