IRS to Church: Be Thou Not Partisan
PASADENA, Calif. — The Internal Revenue Service is threatening to lift the tax-exempt status of a church for condemning President Bush's Iraq War policies during the 2004 presidential campaign season.
Defenders of All Saints Episcopal Church in Pasadena deny any violation of tax law and claim fundamental issues of freedom of speech and religion are at stake.
“We are happy that the IRS goes to church,” All Saints pastor Edwin Bacon told the congregation at a Nov. 13 service. “What we will resist with all our might are all infringements on freedom of speech and freedom of religion.”
The offending sermon was delivered by the church's retired pastor, George Regas. Church spokesman Bob Long noted that Regas’ sermon was explicitly non-partisan. “He said, ‘I'm not going to tell you who to vote for,’ and ‘people of faith were voting for both candidates.’” What's more, Regas criticized both Republican President George Bush and his Democratic challenger, Sen. John Kerry, for their support on the war in Iraq.
This cut no ice with the Internal Revenue Service, said Long, who believes that Regas’ words (archived on the church's website) implied endorsement of Kerry.
Victor Omelczenko, media relations officer with the IRS in Los Angeles, said the agency never commented on individual cases. However, an April, 2004 news release issued by the Internal Revenue Service indicates that “even activities that encourage people to vote for or against a particular candidate on the basis of non-partisan criteria violate the political campaign prohibition of section 501 (c)(3).”
Churches and charities forfeit their exempt status even if they endorse or oppose specific policies at the same time or place as they associate these policies with particular candidates. An October 2004 release from the government agency indicates that 60 investigations were in the works for violations of 501 (c)(3).
Long admits that the lifting of All Saints’ tax-exempt status “would have a real significant impact on the church's operations, especially with a capital campaign coming up.” The action “inhibits our ability to speak truth to power.” Nonetheless, the church has refused the Internal Revenue Service's request for an admission of guilt.
The release also cites a federal court ruling in 2000 against the Church at Pierce Creek in Binghamton, N.Y., which took out full-page ads in USA Today and the Washington Times four days before the 1992 election condemning Bill Clinton's positions on homosexuality, abortion etc. and identifying the church as the purchaser of the ads.
The court rejected the church's claim that IRS regulations infringed the First Amendment right to freedom of religion. As detailed guidelines on political activities and tax exemption on the U.S. Conference of Catholic Bishops website explain, “An exempt organization has a choice between involvement in political campaign activity and the benefits of tax exemption. Because of this distinction, courts have not been sympathetic to claims by religious organizations that the section 501(c)(3) political campaign activity prohibition violates First Amendment rights.”
But Marcus Owens, All Saints’ Washington, D.C., tax lawyer, says the situation at All Saints in 2004 is sufficiently murky for a freedom of religion defense. Instead of a clear endorsement of Kerry by All Saints, he said, “we have the inferential parsing of the English language by the IRS.”
The bishops’ conference declined to comment on the All Saints case or even discuss whether any Catholic churches have been targeted. However, Patrick O’Daniel, a Catholic tax lawyer in Austin, Texas, believes there have been no Catholic infringements — thanks to the bishops’ conference's exhaustive guidelines.
O’Daniel said the amendment responsible for 501 (c)(3) was the work of Lyndon Johnson, after winning election to the Senate in 1954 over a Catholic candidate he believed had received endorsement from Catholic organizations. Ironically, reports O’Daniel, in the same election Johnson wrote letters to Protestant pastors warning them of his opponent's faith and of a flood of Catholic immigrants that could follow his election.
O’Daniel fears that the IRS's crackdown on faith-based political action will have its biggest impact on churches that serve the poor and blacks.
“These churches are community centers that provide all sorts of services,” which are much more likely to be commenting on public policies than wealthier churches. The IRS's action, said O’Daniel, “is not a de jure infringement on freedom of religion but it is de facto.” Loss of tax exempt status would be “the death knell for a charity.” They would have to reincorporate themselves, he said, to regain tax exempt status.
However, Owens believes that churches could survive an adverse IRS finding because unlike charities they do not need an IRS designation to claim charity status. Only if a donor is audited, said Owen, might he have to make the case that a particular church he has given money to warrants exemption.
Steve Weatherbe is based in Victoria, British Columbia.
- December 4-10, 2005