In court filings July 7, the IRS has largely backed down on a decades-old rule that barred churches from engaging in political activity.

According to the New York Times, the IRS made a statement in a court filing that was intended to settle a lawsuit filed by two Texas churches and Christian broadcasters.

The IRS wrote in a new court filing that it had jointly agreed with two Texas churches and an association of Christian broadcasters that sued the IRS that religious institutions should be exempt from...