Today's Los Angeles Times reports that All Saints Episcopal Church in Pasadena could lose its tax-exempt status because of an anti-war sermon given two days before the 2004 Presidential election. The Internal Revenue Service sent a warning letter on June 9 to the church, one of Southern California's largest and most liberal. The church's former rector, the Rev. George F. Regas, had imagined Jesus participating in a political debate with then-candidates George W. Bush and John Kerry. Regas said that "good people of profound faith" could vote for either man, and did not tell parishioners whom to support. But he criticized the war in Iraq, saying that Jesus would have told Bush, "Mr. President, your doctrine of preemptive war is a failed doctrine. Forcibly changing the regime of an enemy that posed no imminent threat has led to disaster."
Marcus Owens, the church's tax attorney, said "I doubt it's politically motivated. I think it is more a case of senior management at IRS not paying attention to what the rules are." Six years ago the IRS used to send about 20 such letters to churches a year. That number has increased sharply because of the agency's recent delegation of audit authority to front-line agents, Marcus said.
The IRS has offered to settle with All Saints and not move to the exam stage if the church admits to improper election activity. However the church refused the offer.
UPDATE: The Los Angeles Times has published an interesting background article on the IRS and political activities by religious organizations.
