California Church Keeps Exempt Status; Questions IRS Conclusions

All Saints Episcopal Church in Pasadena, California earlier this month received a letter from the Internal Revenue Service informing it that its non-profit status would be continued. The letter (full text) said, however, that a 2004 sermon constituted improper interference in a Presidential campaign. The letter said that this appears to be a one-time occurrence and that the Church now has policies in place to prevent future problems. According to Episcopal News Service yesterday, parish leadership has asked the Treasury Inspector General for Tax Administration to furnish an explanation of why the sermon was found to be a problem and also to look into allegations that IRS officials may have breached the Church's privacy rights in conversations with high Justice Department officials. The Church is concerned that the IRS exam may have been triggered by partisan political considerations. (See prior related posting.)