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All Saints Episcopal Church Demands Apology from IRS

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Episcopal Peace Fellowship Protest

Scene from a 2007 antiwar protest organized by the Episcopal Diocese of California, which includes All Saints Church.

Photo: Justin Sullivan / Getty Images.

The Big Question:

Was the IRS investigation of All Saints Church in Pasadena, California politically motivated?

The Sermon:

On October 31, 2004, the Rev. George Regas, retired rector of All Saints Episcopal Church, returned to the pulpit to deliver a stirring antiwar sermon titled "If Jesus Debated Senator Kerry and President Bush." The full text of the sermon is available here (Adobe/PDF). In the sermon, delivered two days before the national election, he describes Jesus as harshly criticizing Bush and praises what he describes as Kerry's more consistently Christian views on war and violence, poverty relief, and national hope.

The Investigation:

In June 2005, the IRS informed leaders of All Saints Pasadena that on the basis of the sermon, the church's religious tax-exempt status was being examined. According to U.S.C. section 501(c)(3), tax-exempt religious nonprofits may not "participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of ... any candidate for public office."

Public Reaction:

Progressive activist groups, such as Americans United for Separation of Church and State, argued that the policy may have been selectively enforced against All Saints due to the sermon's criticism of the incumbent administration in general and its Iraq War policies in particular.

Counterpoints:

In defense of the IRS, however, it is worth noting that:
  • The sermon was delivered two days before the 2004 national elections.
  • The sermon repeatedly mentioned both George W. Bush and John Kerry by name.
  • The sermon depicted Jesus condemning George W. Bush, and cited Christian teachings in such a manner as to explicitly portray John Kerry as the superior candidate.

Conclusion of Investigation:

In September 2007, the IRS ended the investigation without challenging All Saints Church's tax-exempt status. In a letter (Adobe/PDF) announcing that the investigation had ended, the IRS also held that the sermon, while not a threat to the church's nonprofit status on its own, represented an inappropriate intervention in the 2004 presidential elections.

Church's Response:

All Saints Church has demanded an apology. In the church's public response (Adobe/PDF), the Rev. Ed Bacon argues that the letter's vague condemnation of the sermon "does nothing to clarify the boundaries, and therefore perpetuates the intimidation inherent in the threat of IRS investigations based on inferences rather than fact."

Latest Developments:

On September 23, 2007, All Saints Church in Pasadena, California demanded clarification on the exact standards under which the October 2004 sermon was deemed unacceptable. "We have a responsibility," the Rev. Bacon writes, "to advocate not only for All Saints Church, but for other organizations struggling to navigate the murky waters of the IRS rules distinguishing between issue advocacy and partisan intervention."
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