IRS ends church probe

PASADENA — The IRS has dropped an investigation into an anti-war sermon preached at All Saints Episcopal Church two days before the 2004 presidential election, the Rev. Ed Bacon told his cheering congregation Sunday.

The sermon did amount to endorsing the then-Democratic candidate, the Internal Revenue Service told church officials in a letter received Friday, and could have jeopardized the church’s tax-exempt status.

But Bacon said Sunday that while the IRS gave no specific reason for the inquiry into the liberal Episcopal church, it appears to have direct links to the White House and be rooted in partisan politics.

Last week’s IRS response to the church’s freedom of information request on what prompted the investigation was heavily redacted, Bacon said; but the documents “raised the specter of Department of Justice involvement in the crafting of the inquiry.”

“We want the (blacked-out) names of the IRS and DOJ officials and if any people in the White House were involved” Bacon said at a multidenominational forum after the services.

The IRS cannot comment on specific cases, spokesman Jesse Weller said Sunday. But Steven T. Miller, commissioner of the IRS Tax Exempt and Government

Entities Division, released a statement that said the agency “is committed to ensuring that tax-exempt organizations understand and comply with the law.”

In his sermon, Bacon said the documents the church obtained from the IRS — six months after making the request — showed the agency’s chief counsel’s office was “closely coordinating with the Department of Justice personnel to solicit their ‘views on the All Saints case’ ” and sharing drafts of document requests months before any proceedings began.

“We must raise the question whether political appointees at the Department of Justice may have been involved in approving and planning the examination of our church,” Bacon said in his sermon.

Miller wrote that the federal agency will assist charities and churches in following federal guidelines.

“Our goal is to ensure that charities meet their responsibilities under the law and avoid becoming involved in campaign activity,” his statement said.

Bacon said the church wants the IRS to explain what specifically in the guest sermon by former Rector George Regas could be construed as political intervention and trigger an investigation. In his sermon — available on the church’s Web site — Regas imagined what Jesus would say to then-presidential candidates George W. Bush and John Kerry about the war in Iraq.

Regas said, “… we don’t intend to tell you how to vote,” Bacon pointed out. He added that the “ambiguity” of the IRS response leaves concern the church could be investigated anytime someone preaches on “war, poverty or any other social and moral issues.”

All Saints has complained to the Treasury Inspector General for Tax Administration, church officials said in a statement, and will also demand a correction and apology for the “numerous procedural and legal errors” the IRS made in pursuing the inquiry. Bacon said the church has so far spent about $200,000 in legal fees.

State Sen. Jack Scott, D-Altadena — a longtime All Saints parishioner — spoke after the service of being “shoulder to shoulder” with the church on free speech and the issues embodied in the Regas sermon.

“It’s the same message you find in The Sermon on the Mount” preached by Jesus, Scott said. “Perhaps he, too, would have been charged with endorsing a candidate.”

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