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

The agency's agreement in a court filing formally reverses a decades-old provision of the tax code, but the motion would need to be approved by a judge.

The change in IRS code came after a lawsuit tried to challenge the Johnson Amendment, a longstanding principle of separation of church and state that exists to prevent religious organizations from functioning as de facto political PACs, which are financed through tax-deductible donations.