All Saints IRS investigation over

The leader of a liberal church that came under scrutiny by the Internal Revenue Service said it no longer faces the imminent loss of its tax-exempt status because of an anti-war sermon delivered days before the 2004 presidential election.

The Rev. J. Edwin Bacon Jr. told the congregants at All Saints Episcopal Church on Sunday that the IRS has closed a lengthy investigation into a speech by the church's former rector, Rev. George F. Regas.

In the sermon, Regas did not urge parishioners to support President Bush or Sen. John Kerry, D-Mass., but was critical of the Iraq war and Bush's tax cuts.

Federal tax codes prohibit churches and other tax-exempt institutions from endorsing or opposing political candidates.

Pasadena church wants apology from IRS

The Internal Revenue Service has told a prominent Pasadena church that it has ended its lengthy investigation into a 2004 antiwar sermon, church leaders said Sunday.
But the agency wrote in its letter to All Saints Episcopal Church that officials still considered the sermon to have been illegal, prompting the church to seek clarification, a corrected record and an apology from the IRS, the church's rector told standing-room-only crowds of parishioners at Sunday's services.

The church also has asked the Treasury Department, which oversees the IRS, to investigate allegations that officials from the Justice Department had become involved in the matter, raising concerns that the investigation was politically motivated.

"To be sure, we are pleased that the IRS exam is over," the Rev. J. Edwin Bacon Jr. said in his 9 a.m. sermon, which was interrupted several times by applause. "However, the main issue of protecting the freedom of this church and other religious communities to worship according to the dictates of their conscience and core values is far from accomplished."