October 4, 2007 | Read Time: 4 minutes
An Episcopal church in California is demanding that the Internal Revenue Service apologize for — and explain how it handled — a just-closed investigation that concluded the church broke federal law on political activities.
What’s more, All Saints Church in Pasadena said it was concerned that IRS officials “may have breached the church’s confidentiality rights in inappropriate conversations with high-level Department of Justice personnel, which heightens the church’s concern that the exam may have been influenced by partisan political considerations.”
Two years ago the IRS warned All Saints Church that an antiwar sermon by a former rector, delivered the Sunday before the 2004 presidential election, may have constituted improper involvement in the campaign and that the tax agency was examining the matter (The Chronicle, November 24, 2005).
Under federal law, churches and charities must not participate in a political campaign in support of, or in opposition to, a candidate for public office. An organization that violates the law a single time could be forced to pay a penalty fee and have its tax exemption revoked.
Last week, the church released a letter it received from the IRS that said the investigation was complete. The IRS concluded that the church had improperly intervened in the 2004 campaign but said the church continues to qualify for a federal tax exemption. The IRS did not say if the church owed a penalty fee. “We note that this appears to be a one-time occurrence and that you have policies in place to ensure that the church complies with the prohibition against intervention in campaigns for public office,” the IRS said in a brief, four-paragraph letter.
“We advise you to inform guest speakers of your policy and be mindful of that policy when posting information that makes reference to specific candidates on your Web site during future election campaigns,” the revenue service said.
‘Legal Errors’
In response, All Saints Church, which has denied all allegations of impropriety, said it has referred “numerous procedural and legal errors” of the tax agency’s review to the Commissioner of Internal Revenue and is seeking a “correction and an apology” from the IRS for the investigation. The church is also asking the U.S. treasury inspector general for tax administration to review the case.
“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,” said the Rev. J. Edwin Bacon Jr., the rector of All Saints Church. “The letter is impossible to interpret, and I for one am left wondering whether we will be investigated again the next time I am called to preach about the war, poverty, or any other social and moral issues. We have no more guidance about the IRS’s rules than when we started this process over two long years ago.”
The IRS had no comment on the reaction of All Saints Church because the tax agency is prohibited by law from discussing specific cases. But in a statement, Steven T. Miller, commissioner of the IRS’s Tax Exempt and Government Entities Division, said the revenue service is “committed to ensuring that tax-exempt organizations understand and comply with the law. We will continue to work with churches and charities 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.”
The lawyer for All Saints Church, Marc Owens, told the treasury inspector general for tax administration in a letter that documents the church had obtained from the government through the Freedom of Information Act showed that the U.S. Department of Justice “was deeply involved in the examination of All Saints Church long before any referral of the case to DOJ could have been justified.”
Mr. Owens added: “In view of the fact that recent Congressional inquiries have revealed extensive politicization of DOJ, my client is very concerned that the close coordination undertaken by the IRS allowed partisan political concerns to direct the course of the All Saints examination.”
The Justice Department said it had “no comment on this case at this time.”
The guest sermon in question — by the Rev. George F. Regas, rector emeritus — was titled “If Jesus Debated Senator Kerry and President Bush.” Mr. Regas told the congregation that he did not intend to say how members should vote; he then described what Jesus might say to the candidates on issues of war and violence, poverty, and hope.
The IRS’s letter to All Saints Church and related documents are available on the church’s Web site.
