The IRS is investigating a California pastor's involvement in the presidential campaign of Republican Mike Huckabee. Pastor Wiley Drake, of Buena Park First Southern Baptist Church in Buena Park, California received a letter from the IRS stating, "Because a reasonable belief exists that the Church has engage in political activities that could jeopardize its tax-exempt status as a church under section 501(a), this letter is notice of the beginning of a church tax inquiry described in IRC section 7611(a)."

The Alliance Defense Fund is serving as Mr. Drake's counsel in the matter.

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Americans United for Separation of Church and State (AU) have asked the Internal Revenue Service (IRS) to investigate a Nevada church for a possible endorsement of Democratic presidential candidate Barack Obama. According to the AU press release, "Obama spoke during services at the Pentecostal Temple Church of God in Christ in Las Vegas on Jan. 13 in what the Las Vegas Review-Journal described as a 'surprise appearance.'" A blog posting from mydd.com discusses the event. Reportedly, the pastor of the church said, "if you can't support your own, you won't get anywhere." Does this amount to an explicit endorsement?

In an open letter printed in the Wall Street Journal, Pastor Taylor of Calvary Assembly of God in Algoma, Wisconsin challenges the Internal Revenue Service (IRS) to investigate his church and a November 2006 sermon for possible campaign intervention. The letter in the Wall Street Journal was paid for by the Becket Fund for Religious Liberty, an interfaith, public-interest law firm. The Becket Fund's National Litigation Director Eric was quoted in BNA Money and Politics ($$) saying his law firm is basing its defense on the church autonomy doctrine that prohibits states from interfering with the way a church is governed.

They charge that the IRS is misinterpreting federal tax law to censor sermons about political figures and political issues. Under IRS rules, churches are not allowed to explicitly or implicitly endorse particular candidates for political office without risking their tax-exempt status, but the Becket Fund press release asserts that "clergy speaking to their congregations is not the same as a church, as a legal entity, endorsing a candidate."

The letter references the recent All Saints Episcopal Church case that ended without the church losing it tax-exempt status despite the IRS stating that they did in fact intervene in the campaign. "But now you've all but admitted that you can't enforce these rules against the All Saints Episcopal Church in Pasadena, California. We're happy to see that, after some hemming and hawing, you finally dropped your offensive investigation into that church."

Americans United for Separation of Church and State has responded, considering the letter "mocks the IRS and dares the federal agency to investigate his church for a supposedly political sermon he delivered in 2006. . . . the ad is based on inaccurate information and could lead unwary religious groups to violate federal tax law, encounter fines and lose their tax exemptions." And in response to the Becket Fund's allegation that the IRS will not enforce the rules, AU cites examples of IRS enforcement including weak ones such as written warnings from the IRS about political activity in 2004 and 2006.

The LA Times reports that All Saints Episcopal Church in Pasadena, California has announced that the Internal Revenue Service (IRS) investigation which began June 2005 has now been closed. The IRS will not revoke the church's tax-exempt status because of a 2004 anti-war, anti-poverty sermon delivered by its former pastor Rev. George F. Regas on the Sunday before the 2004 presidential election, despite the IRS determination that "the Church intervened in the 2004 Presidential election campaign." The letter the IRS sent to All Saints says; "We note this appears to be a one-time occurrence and that you have policies in place to ensure that the Church complies with the prohibition against intervention in campaigns for public office."

The church has now asked the Treasury Department to investigate if the investigation was politically motivated and whether officials from the Justice Department had become involved in the matter.

The All Saints press release states; "Synagogues, mosques, and churches across America have no more guidance about how the IRS rules now than when we started this process over two long years ago. The impact of the letter leaves a chilling effect cast over the freedom of America's pulpits to preach core moral values. We have no choice but to demand clarification on this matter with the IRS."

BNA Money and Politics ($$) describes the investigation as, "a test case for freedom of the pulpit and a focal point of the debate over free speech in churches."

Americans United for Separation of Church and State (AU) filed a complaint with the Internal Revenue Service (IRS) asking for the investigation of the First Southern Baptist Church of Buena Park, California. AU Executive Director Barry Lynn said that the church's pastor, Dr. Wiley Drake, issued a news release on church letterhead Aug. 11 endorsing Republican presidential candidate Mike Huckabee which leaves the church at risk for violating federal tax law barring electioneering by non-profit groups. Drake also endorsed Huckabee on a church-affiliated radio show and featured a Huckabee campaign official. AU questions the relationship between the church and the radio show, given that they share the same telephone number indicating that resources are also shared. Read the AU press release and its complaint here.

"Use of church letterhead to endorse a candidate for public office appears to violate the provisions of federal tax law that prohibit non-profit intervention in political campaigns," Lynn wrote. "Drake's endorsement of a candidate on a church-based radio show raises the same concerns."

And the following day AU criticized the church pastor "who has urged followers to pray for the demise of staff members of the religious liberty watchdog group."

Americans United for the Separation of Church and State (AU) have asked the Internal Revenue Service (IRS) to investigate the Roman Catholic Diocese of Providence, R.I., because of an article written by Bishop Thomas Tobin criticizing Republican presidential candidate Rudy Giuliani for his position on abortion. The article appeared in the diocese's official publication and said he would never support a candidate who supports legalized abortion. The IRS's recent Revenue Ruling 2007-41 states that in order for an organization "to remain tax exempt under section 501(c)(3), leaders cannot make partisan comments in official organization publications or at official functions of the organization."

Religious oriented nonprofits and churches are sure to take heed of the similar headlines appearing in the press, such as, "Religion, politics go hand-in-hand in '08 race,". In light of the Internal Revenue Service (IRS) Political Activities Compliance Initiate (PACI) and its latest report on the 2006 cases, many groups may feel pulled in opposite directions. A ban on political activity by charities and churches becomes compounded when presidential candidates increasingly open up about their faith as a matter of importance to the public, and as a tool that guides them on views on policy and government.

The evangelical group Sojourners sponsored a candidate forum Faith, Values, and Poverty where candidates John Edwards, and Senators Hillary Clinton (D-NY) and Barack Obama (D-IL) spoke of their personal faith. The New York Times covered this event and how it has now become crucial for candidates to discuss faith and reach out to religious communities. "Democratic Sens. Hillary Rodham Clinton and Barack Obama have hired strategists to focus on reaching religious voters. Obama's campaign holds a weekly conference call with key supporters in early primary and caucus states whose role is to spread the candidate's message to religious leaders and opinionmakers and report their concerns to the campaign."

The Wichita Eagle reports that the Internal Revenue Service (IRS) has asked Pastor Mark Holick of Spirit One Christian Center in Wichita Kansas to answer thirty one questions about political activities at the church. The questionable activities include the pastor distributing voter guides and messages on the church's marquee critical of candidates and their position on abortion. Holick has scheduled a news conference today at the church to discuss the issue. The IRS wanted to know whether or not the former Kansas Attorney General Phill Kline spoke at the church and if his campaign asked for the church's support. Holick reportedly answered no. In October, the IRS was asked to investigate churches for possible involvement in helping with Kline's re-election campaign. Holick was also questioned about his involvement with Kansans for Life, and in passing out voter guides in front of a Wichita church.

But Holick said he won't stop speaking out on issues such as abortion, even if it means naming politicians. "It's a clear violation of the First Amendment, the free exercise of religion, the free exercise of speech," said Holick, one of the most outspoken abortion opponents in the Wichita area.

In related news, the Washington Post reports that Americans United for Separation of Church and State (AU) wants the IRS to revoke the 501(c)(3) status of Bill Keller Ministries because of the statements he made about Mitt Romney. Keller has a call-in show on a Tampa television station and a Web site called Liveprayer.com. On May 11, Keller claims that he was making a spiritual statement when he warned listeners; "if you vote for Mitt Romney, you are voting for Satan!"

An op-ed in yesterday's USA Today "Turning a blind eye, IRS enables church politicking" disapproves of the way the IRS is handling a supposedly growing number of churches that do not comply with the ban on endorsing candidates or political parties. The article notes that 40 churches were investigated for activity during the 2004 election season and not one had its tax-exempt status revoked.

Instead, the IRS wrote advisories, warning citations that carry no punishment, or assessed excise taxes, the equivalent of light fines, on those churches. The IRS justifies this slap-on-the-wrist approach by claiming that it wants to bring churches into compliance with IRS rules rather than punish them.

Or, perhaps the IRS is indirectly allowing such behavior through inadequate guidance and enforcement, which this op-ed fails to consider. As OMB Watch has recommended; "Concrete guidance, bright line rules defining partisan intervention, and/or safe harbors should be considered so that charities can know what is and is not allowed."

The USA Today article lists churches that are currently under investigation. This includes the well-known All Saints Church in Pasadena California, which according to the author, should not be worried about losing its tax-exempt status based off of previous cases. However, a blog post from the Center for Competitive Politics (CCP) responded to that point.

All Saints has been incurring legal bills in connection with this investigation since 2004. And thanks to the hopelessly abstruse "facts and circumstances test" used by the IRS to evaluate political intervention, it is unlikely that the conclusion of the investigation will leave All Saints with any better idea of how to avoid investigation in the future, other than to avoid all discussion of political issues.

This blog post from moresoftmoneyhardlaw.com responds to both the CCP post and the USA Today article.

Attorneys Marcus S. Owens and Natalie E. Fay wrote an article titled, "Penalizing Instigators of Political Campaign Intervention." The authors suggest that in light of increased attention on IRS audits of tax-exempt groups who have engaged in campaign intervention, the IRS should redirect enforcement measures to the candidates who in fact encourage the misuse, particularly of churches. Owens and Fay describe how candidates entice a church's involvement through various examples, such as candidates who have openly included churches in their campaign strategy, leaving the churches vulnerable. Candidates are therefore benefiting from the work of a church or perhaps an appearance, but the church is violating tax-exempt laws and may or may not be investigated. Bob Bauer has written this in-depth blog entry on their article.

Politicians—such as those who press churches for appearances before their congregations—are inducing the prohibited political intervention and should also be called to account. Owens and Faye propose the use of a provision, Section 6700, that imposes penalties on any person—in this instance the politician—who "cause[s]" another to make false or fraudulent tax statements. "It is only fair," they write, "that the people who benefit from the proscribed activities be held accountable for their actions."