December 5, 2005
Private: The IRS in the Pulpit
by Daniel Kotler- Editor-at-Large
Shortly before the 2004 elections, Rev. George Regas delivered a sermon at All Saints Episcopal Church in Pasadena, CA. The sermon posited a hypothetical debate between George W. Bush, John Kerry, and Jesus of Nazareth, in which Jesus opposes the war in Iraq and stresses the importance of solving poverty. Regas made clear he was not endorsing any particular candidate: "Good people of profound faith will be for either George Bush or John Kerry for reasons deeply rooted in their faith." Nonetheless, the IRS saw this sermon as an "implicit endorsement" of a political candidate, a violation of the requirements that tax-exempt organizations, under Section 501(c) of the Internal Revenue Code, not "intervene in" political campaigns. In June, 2005, the IRS issued a letter threatening to strip All Saints of its tax-exempt status.
The issue in the All Saints investigation is not whether the church should be able to explicitly endorse candidates while retaining tax-exempt status. The First Amendment neither prohibits nor requires exemptions for religious bodies from generally applicable taxes, provided that the taxes do not create prior restraint (as by requiring a flat fee for a license to preach). The courts have held that the rule against intervening in political campaigns does not violate the free-exercise clause, even when enforced against a church. It is important to be clear: no law prohibits a church from intervening in political campaigns. IRC 501(c) simply does not provide certain tax-exemptions to organizations, including churches, which choose to do so.
The issue is whether IRC 501(c) prohibits all discussion of political or social policies from the pulpit, at least when mentioning candidates by name. The Pew Forum on Religious and Public Life explains: "The political activity prohibition does not restrict issue discussions that are not linked to support for or opposition to candidates. Religious organizations need not restrict or alter their discussion of issues during election campaign periods. The fact that candidates may align themselves on one side or another of an issue does not adversely affect the ability of religious organizations to engage in discussions of that issue. That being said, a religious organization may nonetheless violate the political activity prohibition if it communicates preferences for or against particular candidates as part of its issue discussion."
The Washington Times argues further, one can readily accept limitations on 501(c) organizations explicitly endorsing candidates while urging that the IRS should go no further in parsing sermons. In fact, Rev. J. Edwin Bacon Jr., rector of All Saints, says, "over the years we have consistently worked within the IRS regulations - regulations we consider to be healthy for our democracy and which we believe protect the precious principles of freedom of speech and freedom of religion."
All Saints is not the only church that is currently being investigated by the IRS following the 2004 elections. According to the Washington Post, after the 2004 elections the IRS launched 132 inquiries into tax-exempt organizations, including about 60 churches. About half of those inquiries have been completed, the IRS says, without any penalties so far. The LA Times article, which tipped off the IRS to Regas's sermon, also mentioned several religious groups which explicitly endorsed presidential candidates. In a letter requesting the IRS to reconsider the tax-exempt status of Falwell Ministries, the non-partisan group Campaign Legal Center, which monitors political campaigns, argued that Falwell Ministries violated the requirement against intervening in campaigns by officially endorsing George W. Bush on its web site. The CLC claims that the site specifically stated, "For conservative people of faith, voting for principle this year means voting for the reelection of George W. Bush. The alternative, in my mind, is simply unthinkable. To the pro-life, pro-family, pro-traditional marriage, pro-American voters in this nation, we must determine that President Bush is the man with our interests at heart. It is that simple." The CLC noted that the IRS had previously revoked the exemption status of two religious groups--Jimmy Swaggart Ministries in 1986 for endorsing Pat Robertson, and Church at Pierce Creek for urging voters not to vote for Bill Clinton--for engaging in similar behavior. Prof. Patrick O'Daniel, in recounting a number of incidents from the 2000 election, agues "there is arguably widespread non-compliance with the prohibition."
It is unclear whether the IRS is investigating Falwell Ministries or the other religious groups mentioned in the LA Times article. Rev. J. Edwin Bacon Jr., rector of All Saints, asked, "I'm very interested to know whether the IRS is taking a look only at churches that are critical of the war in Iraq, or also at the churches that are supportive of the war and the president." IRS Commissioner Mark W. Everson has defended the IRS's actions by citing a report from the Department of the Treasury accusing the IRS of tardiness and a lack of guidance and resources, but not of political bias. By law, the IRS can't reveal the identities of the organizations it is investigating. Without knowing the details of those other investigations, it is imposssible to tell whether the IRS's investigations are politically motivated.
All Saints has chosen to make the IRS investigation public. Rev. Jesse Jackson commends All Saints for "sensibly decided[ing] to fight this political inquisition in public, not in the secret rooms of the IRS." Traditionally conservative groups have also come to the defense of All Saints Church. Ted Haggard, head of the National Association of Evangelicals, who personally supports the war in Iraq, has joined the fight to do "whatever it takes to get the IRS to stop." Haggard argues, "It is a violation of the Constitution for the IRS to threaten that church. It may not be a violation of IRS regulations, but IRS regulations have been wrong."
Congress has entered the fray. In January 2005, Rep. Walter Jones (R-NC) introduced HR 235, the "Houses of Worship Free Speech Restoration Act of 2005," which provides that no sermon or other statement during religious services can be construed as intervening in a political campaign. Although the political activity restriction currently applies to all 501(c) corporations, HR 235 only limits that restriction as applied to churches, but not to any other non-profits. The resolution, similar to a resolution Jones introduced in 2002, has received little press and has not left committee. In a press conference, Sen. Brownback (R-KS) said, "This bill will finally lift the fear and anxiety from houses of worship that seek to speak out on issues that affect the local community and our nation." An open letter, signed by numerous religious organizations including the Interfaith Alliance and the Episcopal Church, opposes HR 235 as, among other concerns, damaging to religious groups by encouraging the mingling of religion and electoral politics, and unnecessary: "The reality is that religious leaders have an absolute right to use their pulpit to address the moral issues of the day. The only activities tax-exempt houses of worship may not engage in are the endorsement or opposition of political candidates, or the use of their tax-exempt donations to further partisan campaigns. Current law simply limits groups from being both a tax-exempt ministry and a partisan political entity." C. Welton Geddy, president of the Interfaith Alliance, speculates that the IRS investigation of progressive All Saints might be a device to develop broader support for HR 235.
The pursuit of justice plays a fundamental role in many religious traditions. German theologian Johann Baptist Metz explained: "It is impossible to privatize the eschatological promises of biblical tradition: liberty, peace, justice, reconciliation. Again and again they force us to assume our responsibility towards society." Indeed, Jesse Jackson notes, "This is a president [Bush] who employs religious language and often claims a mandate from above for his policies. The president says his favorite philosopher is Jesus." When politicians directly invoke religious doctrines, we might wonder whether all religious discussion ultimately constitutes an implicit endorsement or rejection of particular politicians. When the IRS parses some sermons for hints of political campaigning, but apparently declines to investigate explicit endorsements, the IRS arguably creates a chilling effect on religious speech. Steffen Johnson opines: "Many churches simply ignore the campaigning prohibition precisely because it is so rarely enforced. Other churches, by contrast, are always looking over their shoulder, for fear that any political activity will place them in violation of the Code and at risk of losing their tax-exempt status. The restriction thus has an in terrorem effect, and the IRS's lack of enforcement creates a tremendous disparity between churches who take the requirement seriously and those who think it is a joke. The remedy for this, of course, is not overactive enforcement of the restriction but rather clarification of the law to indicate what sorts of activities are likely to put a church's tax exemption at risk."