Church to defy IRS summons

by Janette Williams
PASADENA
All Saints Church leaders defiantly vowed Thursday to take the IRS to court, challenging the tax agency's right to demand records relating to a politically themed guest sermon delivered just before the 2004 presidential election.

All Saints Rector Ed Bacon said that two Internal Revenue Service summonses for church records served last week undermined the free-speech rights of all faiths to preach on "issues of war, poverty, bigotry, torture and terrorism" without endangering their tax-exempt status.

Bacon said he will not appear to testify on Oct. 11, as the IRS had demanded.

The church's 26-member vestry - its board of governors - voted unanimously Thursday to refuse to comply with the summonses, Senior Warden Robert Long said.

Although the liberal Episcopalian congregation of about 3,500 - for decades touted as the largest, and perhaps the wealthiest, in the West - has a "long history" of speaking out on issues of the day, it has never crossed the line into politicking, Long said.

"We have nothing to hide," he said. "We have reviewed the documents \ and we believe they fully support our position that we have always been mindful and respectful of the regulations, and have always been in compliance with them."

An IRS statement Thursday did not comment directly on the All Saints investigation, saying only that there are constitutional rights to freedom of speech and religion, but not to tax-exempt status for nonprofits that get political.

Only rarely has the IRS actually revoked the tax-exempt status of charities or churches.

Long said that taking the IRS to court rather than agreeing to turn over documents will be expensive, utilizing funds that would be better used for church programs.

But the IRS challenge "can be addressed only by standing up now and protecting ourselves from the chilling effect on free speech and the free exercise of religion," Long said. He said the move will also be "a stand for the churches, synagogues and mosques across our country who may find themselves in similar circumstances, but less able or well-funded to make such a challenge," Long said,

In a show of interfaith solidarity with the church's decision, about 40 representatives of Southland religious communities crowded All Saints' altar.

Shakeel Sayed, president of the Islamic Shura Council of Southern California, spoke of his group's "total and complete solidarity" with All Saints'

decision; Rabbi Neil Commess-Daniels of Beth Shir Shalom handed over a donation for the church's legal fund, and asked others to contribute.

Ed McCaffery, dean of USC School of Law and an expert on taxation, said he was surprised the IRS has continued to press the investigation.

"My own view is that the IRS is wrong. They have an incorrect interpretation of the statute" governing church involvement in politics, McCaffery said.

But, he said, that doesn't mean the IRS will not prevail in asserting its right to review church documents.

"My guess would be that the IRS would win" in court. But, he said, it was less certain the IRS would win a battle over the the church's First Amendment rights.

Bacon said he has no idea why the sermon preached by All Saints Rector Emeritus George Regas triggered the IRS investigation. In it, Regas speculated on how Jesus would weigh in on a debate between presidential candidates George W. Bush and John Kerry. Regas, while harshly critical of some Bush policies, told parishioners they'd be spiritually justified in voting for either candidate.

The church has filed a Freedom of Information request to see where the complaint originated, Bacon said.

McCaffrey said he saw "nothing wrong with the letter or spirit" of the sermon.

"Should a church be liable for the words of a guest sermon? Should the IRS be looking at words? I don't think so," McCaffrey said. "Why they don't find a reasonable way to end this saga is a puzzling question."

McCaffrey said if the IRS investigated pastors' words to check for political positions, it would cover sermons on such issues as abortion, the death penalty and teaching evolution in schools. "These are the things pastors talk about all the time," he said.

In purely practical terms, he said, the IRS hasn't even enough personnel to fulfill its mandate to collect taxes.

"Is this the appropriate agency to be looking at what's being said Saturdays and Sundays in religious places?" he said. "That's just nutty."