California Church Won’t Be Penalized By IRS For Pre-Election Sermon

The Internal Revenue Service says a California church violated federal tax law by hosting a guest minister who gave a politically charged sermon just days before the 2004 election, but the church won’t be penalized.

All Saints Episcopal Church in Pasadena received a letter from the IRS in September stating that the sermon was a violation of federal law that bars houses of worship and other non-profit groups from intervening in elections. But the letter added that All Saints is still considered tax exempt.

All Saints’ problems with the IRS began after the Los Angeles Times on Nov. 1, 2004, ran an article about a sermon delivered by the Rev. George Regas, the church’s former minister. During the homily, Regas imagined a debate be­tween George W. Bush, Democratic nom­inee John F. Kerry and Jesus Christ.

Regas did not directly endorse either candidate, but his speech was highly critical of Bush. He said Jesus would have opposed the war in Iraq and opined that Bush’s strategy “has led to disaster.”

In September, the Times reported, “In its latest letter to All Saints, dated Sept. 10, the IRS said the church continues to qualify for tax-exempt status, but said that Regas’ sermon did amount to intervention in the 2004 presidential race. The letter offered no details or explanation for either conclusion.”

Officials at the IRS refused to elaborate on the letter.

In a statement, Steven T. Miller, commissioner of the agency’s Tax Exempt and Government Entities Division, wrote, “The IRS is committed to ensuring that tax-exempt organizations understand and comply with the law. We 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.”

The Rev. J. Edwin Bacon Jr., current pastor at All Saints, said he is happy the investigation is over but still has questions about the process. During a sermon Bacon delivered after receiving the IRS letter, he told the congregation, “[We have] no more guidance about the IRS rules now than when we started this process.”

Bacon said the church would seek an apology from the IRS. He also charged that the investigation of All Saints may have been politically motivated. At­torneys for the church used the Freedom of Information Act to acquire information about the investigation. Some e-mails they received indicate that the U.S. Justice Department was involved in the case before the IRS took it up.