IRS Ends Audit of Minnesota Church in Case About Sermons

The Internal Revenue Service has told a Minnesota church under examination for the content of the pastor’s sermons that the government is no longer pursuing the audit because of a “procedural issue” involving the tax agency’s initial inquiry into the church.

But in a letter to the Warroad Community Church, in Warroad, Minn., the IRS said that it “may commence a future inquiry” into the church after the agency resolves the procedural matter, which the government did not explain in detail.

Gus Booth, pastor of the church, was one of many ministers who last year preached sermons intended to deliberately challenge the 1954 federal law prohibiting charitable organizations and churches from engaging in partisan political activity.

The Alliance Defense Fund, a Scottsdale, Ariz., nonprofit group that argues cases on behalf of Christian causes, promised free legal support under its “Pulpit Initiative” to churches, including Warroad Community Church, that agreed to challenge the federal ban on political speech during sermons about the moral qualifications of candidates seeking political office that were given on Sunday, September 28, of last year.

The fund has said that its initiative is not about “whether pastors should or should not ‘endorse’ candidates” but about restoring “the right of pastors to speak freely from the pulpit without fear of punishment by the government for doing what churches do: speak on any number of cultural and societal issues from a Biblical perspective.”

According to a statement from the Alliance Defense Fund, Mr. Booth sent the IRS a copy of a sermon he preached in May 2008 about primary elections and a copy of his September 28 sermon about the general election. The fund said that the IRS began an inquiry in August 2008.

In a short, July 7, 2009, letter to the church, the IRS said that it was closing the examination because of “a pending issue regarding the procedure used to initiate the inquiry.”

IRS officials could not immediately be reached for comment.

Lawyers for the Alliance Defense Fund said they were disappointed the IRS has dropped the examination. “ADF would likely have waived any complaint about procedural concerns involved in the investigation stage of the audit in order to reach the merits of the case and clarify the law,” said Erik Stanley, the fund’s senior legal counsel, in a statement.

The IRS suffered a setback earlier this year when a federal court ruled that a different church did not have to comply with an IRS summons for information because the summons was authorized by a government official of insufficient rank.

Some tax-law experts have said that the IRS’s defeat in the case could force the agency to write new rules to determine who has the authority to order an investigation into a church.