California Church Vows to Fight IRS Investigation of Sermon

Pasadena, Calif., Nov. 8 - An Episcopal Church says it will fight to keep its tax-exempt status in light of an Internal Revenue Service investigation into a politically charged sermon.

The Rev. Ed Bacon, rector of All Saints Church, said Monday that the church learned of the investigation in June, and he made it public in services Sunday because the IRS appears to be close to a decision on the matter. The investigation was triggered by a sermon delivered by Rector Emeritus George Regas.

While many churches deal with politics in general from the pulpit, they are enjoined from making endorsements if they wish to stay tax-free.

The IRS notified the church of the investigation in a letter that cited an Oct. 31, 2004, sermon by Regas called "If Jesus Debated Senator Kerry and President Bush." Church leaders say they have done nothing wrong.

"There's much more at stake than All Saints in this" investigation, said Bacon. "I think it's a defining moment about religious freedom in the United States."

All Saints Episcopal Church started in 1892 with a small gathering of parishioners in a home. Now, about 3,500 people attend the socially liberal church every week. IRS officials would not confirm the investigation because of what they called confidentiality concerns during an ongoing probe.

The agency's regulations prohibit churches from participating in any political campaign on behalf of one candidate. Endorsements, donations or statements made on behalf of a church are also not allowed. Even a debate or forum that shows a preference for or against a particular candidate could violate regulations, according to IRS guidelines.

Regas' sermon speculated about what Jesus would say to Bush and Democratic candidate John Kerry on subjects including poverty, violence and war.

In his introduction, Regas said he did not intend to tell people how to vote, but at one point, Regas imagined the words Jesus would have for Bush: "Mr. President, your doctrine of a pre-emptive war is a failed doctrine. Forcibly changing the regime of an enemy that posed no imminent threat has led to disaster."

Bacon said the IRS asked for supporting documents in its letter, which the church provided. Then the agency offered a deal: If the church would say it violated regulations and promise to comply in the future, the IRS would drop its investigation.

The church replied that it had not broken any regulations.

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