Non-profit Organizations Underfire by IRS for Political Statements

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The LA TImes is reporting that the IRS threatened revoking the tax-exempt status of the All Saints Episcopal Church in Pasadena. This is because during a 2004 sermon, a church rector stated that he opposed the Vietnam and Gulf wars and that Jesus would have disapproved of the Bush Administration’s war offensive.

A non-profit can not be involved in politics. The question really is “Was the rector’s statement political?” Over 100 organizations are currently under review by the IRS for statements made during the 2004 presidential campaign. The IRS’s position is that this is a case of a disallowed activity – politics. The organizations (most of them religious organizations) say that this is a First Amendment issue.

I suspect this will all end up in the courts. To be honest, I’m not sure where I fall in this argument. On one hand, I believe that the rector’s comments sounded more like personal comments. He didn’t tell anyone how to vote. He said, “I oppose..” not “You should all oppose..” Some Constitutional scholars are making the argument that there should be broader latitude for religious organizations under the IRS’s non-profit rules.

And the investigation feels a little one-sided as well. I don’t know the answer. But I do know that the IRS has changed. It’s not the “kinder, gentler” IRS post-Senate Hearings in the 1990’s. It’s now a hungry pit bull, looking for one little misstep. Ironically, though, under the Freedom of Information Act, they have to tell us what they’re going to do, often years in advance. And that’s what we’re doing. We’re watching everything right now.

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