IRS Drops Charges Against Liberal Church

From the Los Angeles Times:

The Internal Revenue Service has told a prominent Pasadena church that it has ended its lengthy investigation into a 2004 antiwar sermon, church leaders said Sunday.

But the agency wrote in its letter to All Saints Episcopal Church that officials still considered the sermon to have been illegal, prompting the church to seek clarification, a corrected record and an apology from the IRS, the church's rector told standing-room-only crowds of parishioners at Sunday's services.

The church also has asked the Treasury Department, which oversees the IRS, to investigate allegations that officials from the Justice Department had become involved in the matter, raising concerns that the investigation was politically motivated.

"To be sure, we are pleased that the IRS exam is over," the Rev. J. Edwin Bacon Jr. said in his 9 a.m. sermon, which was interrupted several times by applause. "However, the main issue of protecting the freedom of this church and other religious communities to worship according to the dictates of their conscience and core values is far from accomplished."

Bacon predicted that the vague, mixed message from the IRS after its nearly two-year investigation of the All Saints case would have a continued "chilling effect" on the freedom of clerics from all faiths to preach about moral values and significant social issues such as war and poverty.

Although the church no longer faces the imminent loss of its tax-exempt status, All Saints has "no more guidance about the IRS rules now than when we started this process," the rector said. He said the church would continue its struggle with the IRS, which he said so far had cost the 3,500-member congregation about $200,000.

One of Southern California's largest and most liberal congregations, All Saints came under IRS scrutiny after a sermon two days before the 2004 presidential election by a guest speaker, the Rev. George F. Regas. In his sermon, Regas, the church's former rector, imagined Jesus participating in a political debate with then-presidential candidates George W. Bush and John F. Kerry.

Regas did not endorse either candidate, saying that "good people of profound faith" could support either one. But he strongly criticized the war in Iraq and said that Jesus would have told Bush that his preemptive war strategy in Iraq "has led to disaster."

A letter from the IRS arrived in June 2005 stating that the church's tax-exempt status was in jeopardy. Federal law prohibits tax-exempt organizations, including churches, from intervening in political campaigns and elections. ...

There was nothing in that sermon that crossed the line. What Regas said was non-partisan, very political, dead-on, and exactly what Jesus would have said to George Bush.