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Anti-War Sermon Leads IRS to Probe Church for Tax Violations

The Internal Revenue Service has ordered a prominent liberal church to turn over documents and e-mails it produced during the 2004 election year that contain references to political candidates.

The IRS is investigating whether All Saints Episcopal Church in Pasadena violated the federal tax code when its former rector, Rev. George F. Regas, delivered an anti-war sermon on the eve of the last presidential election.

Tax-exempt organizations are barred from intervening in political campaigns and elections, and the church could lose its tax-exempt status.

Rev. Ed Bacon received a summons Thursday ordering the church to present any politically charged sermons, newsletters and electronic communications by Sept 29.

Bacon was ordered to testify before IRS officials Oct. 11. He said he will inform his roughly 3,500 congregants about the investigation at Sunday's services, and will seek their advice on whether to comply.

"There is a lot at stake here," Bacon said. "If the IRS prevails, it will have a chilling effect on the practice of religion in America."

An IRS spokesperson declined comment on the investigation.

In a sermon two days before the 2004 election, Regas did not urge parishioners to support President Bush or challenger John Kerry but was critical of the Iraq war and Bush's tax cuts, Bacon said in an interview last November when the investigation was announced.

"He explicitly said, 'I am not telling you how to vote.' That is the golden boundary we did not cross," he said.

All Saints has a long history of social activism, dating back to World War II, when its rector spoke out against the internment of Japanese Americans. Regas, who headed the church for 28 years before retiring in 1995, was well-known for opposing the Vietnam War, championing female clergy and supporting gays and lesbians in the church.

The IRS has revoked a church's charitable designation at least once. A church in Binghamton, N.Y., lost its status after running advertisements against Bill Clinton's candidacy before the 1992 presidential election.