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The case against All Saints: Has the IRS gone too far?
Inside the First Amendment

By Charles C. Haynes
First Amendment Center senior scholar

Taking pleasure in the pain of others isn’t the Christian thing to do. But conservative churches may be forgiven for feeling a bit of schadenfreude after the revelation this month that the Internal Revenue Service is threatening to revoke the tax-exempt status of All Saints Episcopal Church in Pasadena, Calif. — one of the nation’s largest liberal congregations.

Many evangelicals have been complaining for years that IRS regulations muzzle free speech of clergy from the pulpit. Now that people on the left are stirred up by the IRS threat against All Saints, people on the right are hoping to find common cause in challenging the IRS.

The IRS investigation of All Saints was triggered by a sermon preached by the church’s former rector, the Rev. George Regas, two days before the 2004 presidential election. Although Regas stated up front that he wasn’t telling anyone how to vote, he went on to deliver a blistering attack on the Bush administration’s policies, especially the war in Iraq. “Jesus places on your heart this question,” said Regas: “When you go to the polls this November, will you vote all your values?”

Under IRS regulations for tax-exempt religious organizations, clergy are free to preach about moral or political issues, but may not “participate in, or intervene in any political campaign on behalf of (or in opposition to) any candidate” for public office. Did Regas cross the line? The IRS says yes, the church says no.

If you listen to the sermon, it’s not hard to figure out how Regas hoped his congregants would vote. But if an implied endorsement rises to the level of a tax-code violation, then what can any preacher safely say about public policy during an election campaign? The answer, apparently, depends on how much partisanship IRS officials read into the sermon.

For many churches, liberal and conservative, all of this adds up to subjective decisions based on vague guidelines by IRS officials who may have a partisan axe to grind. Robert Edger, general secretary of the National Council of Churches, told the Los Angeles Times that the IRS action against All Saints appeared to be “a political witch hunt.” Many evangelical leaders are equally convinced that IRS investigations unfairly target their churches. Meanwhile, advocacy groups on both ends of the spectrum are ramping up efforts to monitor churches they suspect are violating IRS regulations. 

With spies slipping into pews — and more than 60 nonprofits currently under investigation (according to the IRS) — is it time to change the rules? Rep. Walter A. Jones, R-N.C., certainly thinks so. His Houses of Worship Free Speech Restoration Act would amend the IRS code to allow endorsements of political candidates from the pulpit. The bill would only affect speech during worship services or gatherings, leaving in place the ban on participation in campaign activity for or against political candidates.

With 165 cosponsors in the House of Representatives (all but a handful are Republicans) and support from most conservative Christian organizations, the Jones bill has a fair shot at passage. Will this latest threat to All Saints bring liberal churches and Democrats on board? Not likely.

Even if many liberals are outraged by IRS actions, they aren’t ready to lift the ban on political endorsements from the pulpit. As Elliot Mincberg of People for the American Way explained in an interview, a core problem with the Jones bill is that it singles out religious groups for preferential treatment. He argues that allowing only religious groups and not other tax-exempt nonprofits to endorse candidates is not only unfair — it may violate the establishment clause of the First Amendment.

Americans United for Separation of Church and State warns on its Web site that the Jones bill would circumvent campaign laws by using tax-deductible contributions to fund partisan campaigns. “People donate to their houses of worship,” says AU’s Barry Lynn, “knowing those donations are not going to support a politician’s campaign.”

The answer from some on the liberal side: Keep the IRS regulations, but make sure the ground rules are clear. Mincberg calls for new guidelines that “draw the line” in ways less open to subjective interpretation by IRS officials.

However much left and right disagree about the solution, many on both sides agree there’s a problem. When news of the All Saints case broke, the Los Angeles Times reported that Ted Haggard, head of the National Association of Evangelicals, immediately reached out to the liberal National Council of Churches, vowing to do “whatever it takes to get the IRS to stop.”

Confronted with this holy alliance, the IRS may now wish it had left All Saints Episcopal Church alone. The agency offered to drop the case, but only if the church admitted that the sermon crossed the line. All Saints refused. Now the IRS must either revoke the tax-exempt status of a church because of one anti-war sermon — or back off and admit that IRS officials went too far.

Whatever the outcome of this conflict — whether we end by erasing the lines or drawing new ones — this is a debate worth having. Religious freedom doesn’t mean much if houses of worship are intimidated by the IRS when they speak out on matters of conscience.

Charles C. Haynes is senior scholar at the First Amendment Center, 1101 Wilson Blvd., Arlington, Va. 22209. E-mail:


Federal appeals panel upholds IRS decision to strip church of tax-exempt status

New York church was accused of partisan politicking after buying full-page anti-Clinton newspaper ads in 1992. 05.15.00

L.A. church's tax status in jeopardy over anti-war sermon, priest says
All Souls Episcopal officials say IRS has warned liberal church that it may lose tax exemption for homily delivered on eve of 2004 presidential election. 11.08.05

2 evangelical churches accused of illegal politicking
Thirty-one religious leaders ask IRS to determine whether Ohio churches should lose tax-exempt status because of their support for gubernatorial candidate. 01.19.06

IRS finds churches, charities overstep into politics
According to agency, nearly three out of four nonprofits suspected of having violated restraints on political activity in 2004 election actually did so. 03.02.06

IRS warns churches, nonprofits to avoid politicking
Newspaper reports that agency has sent notices detailing new enforcement program, the Political Activity Compliance Initiative. 07.18.06

Episcopal priest: IRS has dropped probe into anti-war sermon
Meanwhile, liberal Pasadena, Calif., church asks Treasury Department to investigate conversations about it between IRS and Justice Department officials. 09.24.07

Houses of worship joining partisan political fray not a good idea
By Charles C. Haynes House bill to allow churches, synagogues, mosques to endorse candidates, contribute money to campaigns would entangle government with religion. 09.29.02

Politics from the pulpit: free speech or partisan danger?
By Charles C. Haynes American churches getting conflicting advice about what constitutes impermissible political preaching. 10.03.04

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By Charles C. Haynes Conflicts over churches' political role have heated up again for this election cycle. 10.01.06

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