Pasadena church cleared in IRS investigation Keeps tax-exempt status.

[rusty quoin]

All Saints 1, IRS 0
Posted September 24th, 2007 at 1:40 pm
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Shortly before the 2004 presidential election, the Rev. George F. Regas, the former rector of All Saints Episcopal Church in Pasadena, told his congregation about his perspective on the president and the war in Iraq. Regas imagined Jesus participating in a political debate with Bush and Kerry and said that “good people of profound faith” could vote for either man.

He added, however, that he imagined Jesus telling 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.” The comments prompted the IRS to launch an aggressive investigation into the church’s alleged partisan conduct.

Last week, the investigation ended — and All Saints is in the clear.

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. <…>

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.

I’m glad the matter was resolved, but there are still lingering questions about whether the IRS investigation was driven by partisan motivations. It seems scary to think administration officials targeted All Saints because it’s a progressive church, but there’s reason to raise the question.

From the outset, the IRS seemed to deal with All Saints in an unusual way. For example, when a ministry is suspected of intervening in a political campaign, ordinarily the first step is a warning letter from the IRS. In this case, the agency skipped that step and went right to a threatening letter, stating that “a reasonable belief exists that you may not be tax-exempt as a church.”

Moreover, usually a house of worship is reminded of legal limits, the institution promises to play nice, and unless there’s a pattern of repeated abuse, the matter is final. The IRS seems to have taken a far more aggressive position towards All Saints Episcopal. The church provided the IRS with a copy of all literature given out before the election; the IRS said it wasn’t satisfied. The church said it never endorses candidates; the IRS told church officials to either admit wrongdoing or face more intense scrutiny.

For that matter, there were multiple examples from the same election cycle of similar comments from conservative pastors in the South, some of which are arguably far more partisan than the All Saints example, but which did not prompt similar investigations.

All Saints and its lawyers also found unusual interaction between the IRS and the Justice Department in this case.

Along with its requests to the IRS, All Saints has asked a top Treasury Department official to investigate what the church called a series of procedural and substantive errors in the case, including allegedly inappropriate conversations between IRS and Justice Department officials about the investigation.

Those conversations, documented in e-mails obtained by the church through Freedom of Information Act requests, appear to show that Justice Department officials were involved in the All Saints case before the IRS made any formal referral of it for possible prosecution, an attorney for the church said. The discussions raise concerns that the IRS’ investigation was politically motivated, church officials said. One e-mail, for example, appears to show coordination between IRS and Justice Department officials about a request to the church for documents. Others discuss the timing of the request and news coverage about the case.

“In view of the fact that recent congressional inquiries have revealed extensive politicization of , my client is very concerned that the close coordination undertaken by the IRS allowed partisan political concerns to direct the course of the All Saints examination,” attorney Marcus S. Owens wrote in a letter Friday requesting an investigation.

Owens knows what he’s talking about — he’s not just a lawyer, he’s also the former head of the IRS’s tax-exempt division.

Given the circumstances, it’s not unreasonable to wonder if, perhaps, Bush-appointed staffers at the IRS targeted All Saints because they didn’t like the sermon’s criticism of their president. It would be an outrageous abuse of power for the IRS to go after a house of worship based on partisan political concerns, but given what we’ve seen of the Bush gang, it’s hard to offer the administration much in the way of benefit of the doubt.

During Watergate, we learned that Nixon used the IRS to harass and intimidate political opponents. Let’s hope this isn’t a repeat of the same abuse.
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