Church wants IRS apology after probe into 2004 sermon

LOS ANGELES — A prominent Episcopal church wants an apology and clarification after a two-year Internal Revenue Service probe that threatened the church’s tax-exempt status because of an anti-war sermon just before the 2004 elections.

The IRS told All Saints Episcopal Church in Pasadena, Calif., that its tax-exempt status would remain intact despite the sermon that officials said “constituted prohibited political campaign intervention,” according to a press release issued by the church.

On Sept. 23, the church’s rector, the Rev. J. Edwin Bacon Jr., said the letter did “not clarify what in the sermon ... was a transgression.”

“While we are pleased that the IRS examination is finally over, the IRS has failed to explain its conclusion regarding the single sermon at issue. Synagogues, mosques, and churches across America have no more guidance about the IRS rules now than when we started this process over two long years ago,” Bacon said.

In June 2005, the IRS began to investigate the church after the Rev. George Regas delivered a sermon titled “If Jesus debated Senator Kerry and President Bush” on the Sunday before the 2004 election.

In the sermon, Regas said that “good people of profound faith will be for either George Bush or John Kerry.” Regas went on to refer to both candidates as “devout Christians” and made it clear that his intention was not to instruct people how to vote.

But in a Nov. 1, 2004, article, the Los Angeles Times referred to the anti-war, anti-poverty speech as “a searing indictment of the Bush administration’s policies on Iraq.” According to church attorneys, it was that article that prompted the IRS investigation.

Through documents obtained by means of the Freedom of Information Act, All Saints also learned that by February 2006, the Department of Justice may have been working with the IRS on the investigation, which attorneys said “may have violated the rules intended to prevent inter-agency disclosure ... to insure taxpayers’ privacy.” It also heightened concerns that the probe may have been politically motivated.

Although the church admits it would not have been difficult for the congregation to surmise Regas’ political leanings, Bacon said the pulpit was never intended “to advocate for or against any candidate.”

Steven T. Miller, who directs the IRS Tax Exempt and Government Entities Division, said the agency “will continue to work with charities and churches during the 2008 political season about the federal law’s guidelines on political activity. Our goal is to ensure that charities meet their responsibilities under the law and avoid becoming involved in campaign activity.”

— RNS