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Render unto Caesar?

A church confronts the IRS in a battle between free speech and the separation of church and state. Michael Joseph Gross investigates.

Across the street from City Hall in Pasadena, California, stands All Saints Episcopal Church. Keith Holeman, All Saints' full-time director of communications, finds the juxta-position symbolic. "This is an activist church, facing the seat of government," he said, between services on the third Sunday before November's election. "All Saints is constantly going up against governmental things and trying to speak truth to power."In the pulpit that morning, the Reverend Ed Bacon was preaching a sermon called "A Christianity God Can Embrace," mentioning several points of variance between this concept and Bush administration policies. Later that afternoon, the actor Bradley Whitford of West Wing fame, a member of the congregation, was introducing a lecture by a Smith College Professor who is working to stop genocide in Darfur. Under a white tent on the lawn, Peace & Justice Director Vivien Sansour, a 28-year-old Palestinian who was born in Bethlehem, Israel, was passing out voter guides, bumper stickers promoting California ballot initiatives ("Yes on 89–stop political corruption"), and tending sign-up sheets for ride-sharing to polling places."We are not arranging rides," she explained playfully, pointing to a written disclaimer: "We are only providing the service of connecting interested people with each other. However, we do encourage everyone to go out and vote regardless of party affiliation...." In the winking tone you might use to warn a guest about the slightly nutty rules at Grandma's house, she added, "This is America, and there are laws here."American churches do not pay taxes. In exchange for tax-exempt status, they agree to abstain from certain kinds of political advocacy. Yet in recent years, as more churches have become entangled in political campaigning, reported violations of these regulations have increased-especially the one that bans endorsing or opposing individual candidates. Many churches have learned to skirt the regulations, to observe the letter of these laws while at the same time breaking them in spirit, by quietly sanctioning their breach. One result, for many clergy, is a subtle leaching of integrity. Vivien Sansour, like practically everyone at All Saints, is earnest about her mission, and yet cannot speak of it without assuming an air of mock caution; disingenuousness creeps in.Another result is the growing risk of an audit, or, potentially, revocation of tax-exempt status by the Internal Revenue Service. In the 1990s, the IRS reviewed about 20 allegations of political intervention in churches and charities per year. By 2004, the number of cases had grown dramatically, a surge fueled largely by complaints, including some delivered with cloak and dagger. The MAINstream Coalition in Kansas, a nonpartisan group that promotes separation of church and state, sent spies to monitor and report improper political activity at conservative churches. The Religious Freedom Coalition in Washington, D.C., responded by forming a group called Rat Out a Church, which turned the same tactic on liberal congregations. In the 2006 election cycle, watchdog groups such as Citizens for Responsibility and Ethics in Washington, and Americans United for Separation of Church and State filed IRS complaints alleging various acts of campaign intervention. Some of these reported offenses were theatrically cagey (a Minnesota pastor declared in church, "We can't publicly endorse as a church ... any candidate. But I can tell you personally that I am going to vote for ..." and then he named a Republican who had earlier told the congregation that God instructed her to run for Congress), others baldly nefarious (three churches in Kansas were recruited for campaign work by the state's top law enforcement officer, Attorney General Phill Kline), and still more almost implausibly stupid (a Texas church donated $1,500 to the GOP).The case that got the biggest headlines, though, was All Saints, where a strident antiwar sermon on the eve of the 2004 election raised an IRS red flag. Eventually the church refused compliance with an investigator's summons, claiming it infringed upon the church's first amendment right to free exercise of religion. In a letter to the IRS, Marc Owens, All Saints' attorney, speculated that the preliminary IRS investigation was timed to "chill the Church's discussions of fundamental religious issues with policy implications before the midterm elections, and in a way that intrudes into core religious practice." All Saints issued a press release, and the showdown appeared on all three network evening news shows and inspired editorials in the New York Times, the Miami Herald, Christian Century, and dozens more. Most coverage merely amplified the analysis of Bacon, an imposing figure who rises at 4:30 each morning to pray before going to the gym. "What's at stake for me, and what I think is at stake for America," he said, "is the freedom of the pulpit in faith communities to speak the truth and to express their core values."A closer look at the story of All Saints' face-off with the government does suggest a growing threat to religious freedom in this country. But it's not the same problem that Ed Bacon has in mind-and even more surprising, it's a menace that many churches, All Saints included, probably could not live without.


You simply cannot be a person of faith without being involved in politics....That is what distinguished Jesus. That is what distinguished Muhammad.The sermon that started the trouble, "If Jesus Debated Senator Kerry and President Bush," was delivered by a guest preacher, All Saints' Rector Emeritus George Regas. Focusing on the war in Iraq and poverty in America, the sermon was scathing toward George Bush, critical of John Kerry (though mostly for sins of omission), and packed with exhortations building to a climax as subtle as a camp meeting altar call. "I don't intend to tell you how to vote," said Regas. "We can just agree to disagree. You go your way, and I'll go God's way." The quip provoked laughter among the crowd, according to the Los Angeles Times, which covered the service the following day. He closed with, "When you go into the voting booth on Tuesday, take with you all that you know about Jesus, the peacemaker. Take all that Jesus means to you. Then vote your deepest values. Amen." The sermon was a scorcher, but so are lots of sermons at All Saints, which cultivates a friendly relationship with the media as part of its public advocacy mission. This one didn't cause an unusual stir until the following June, when the church received a letter from the Department of the Treasury citing the LA Times story, and quoting its summary of the sermon ("delivered a searing indictment of the Bush Administration's policies in Iraq, criticism of the drive to develop more nuclear weapons, and described tax cuts as inimical to the values of Jesus") as basis for a "reasonable belief ... that you may not be tax-exempt as a church."Tax-exemption for churches, as for other nonprofits, has three conditions. No earnings may accrue to private individuals or shareholders, no "substantial" part of church activities may be directed toward influencing legislation, and the church may not endorse or oppose particular candidates or parties in political campaigns. The first law is the simplest and least controversial: it ensures that nonprofits are not making profits. Because tax-exemption creates the same effect as a government subsidy, the second law asserts the government's right to limit the use of that subsidy to strictly defined church business. The third purports to protect the government's control over how its money flows into political campaigns. (A church that uses any of its tax-exempt resources to campaign for Senator Smith would, in effect, be giving the senator government money.)This last provision, the vaguest of the three, sparked the inquiry at All Saints. "This is a sermon, which is a core religious worship activity of a church, and the government is taking the position that the words in that sermon constituted inferential campaign intervention," said Owens, who was the director of the IRS Exempt Organizations Division from 1990 to 2000. "An inference being inherently subjective, the government is asserting it has the ability to review the particular words used in a worship service for subjective inferences that might be improper under tax law. The church believes the government should have a very high hurdle to overcome before it can put those words to such a test."Moreover, both Bacon and Regas said they believe the offending sermon was scrupulously nonpartisan. And both cited the same statements as proof: "I don't intend to tell you how to vote," and "Good people of profound faith will be for either George Bush or John Kerry." Regas explained, "I was very conscious that it was two days before a presidential election and that my sermon dealt with the candidates, and I was conscious of that line."But why should those gratuitous rhetorical concessions be taken at face value, while "You go your way, and I'll go God's" should be ignored? In context, the whole tenor of the sermon seems fairly ironic-if irony is "a form of utterance that postulates a double audience, consisting of one party that hearing shall hear and shall not understand, and another party that, when more is meant than meets the ear, is aware both of that more and of the outsiders' incomprehension," in H.W. Fowler's definition (which, strikingly, echoes one of Christ's pet phrases, various forms of which appear seven times in the gospels: "he that hath ears to hear, let him hear"). It's hard to imagine any intelligent parishioner listening to this sermon without understanding that the priest opposed George Bush and thought good Christians should vote against him.Does Regas honestly think his sermon left room for any other conclusion? Flinty and dipthonged, he named the ambiguity that makes "campaign intervention" all but impossible for preachers to avoid. "It's awfully difficult to disembody a political activity. Politics is the work of human beings," he says. "And when you take on a political problem, you take on a political policy, you're taking on a politician. There's no way you can separate those."

All Saints became a free-speech cause célebrè because religious leaders of every stripe saw themselves in its story: the plight of this church was their own. An unlikely band of allies, ranging from the Muslim Public Affairs Council to the National Association of Evangelicals, converged in support of the church, suggesting that perhaps the one conviction uniting all believers in this country is that someone, somewhere, would like to shut them up.That's almost certainly true, and religious groups with a prophetic mission-those called to speak to their communities about their encounters with God-especially if those encounters yield insights at odds with Bush administration policies-should beware the administration's techniques for monitoring, intimidating, and harassing critics in the name of protecting national security. Many such tactics, including domestic spying, data mining, and suspension of the writ of habeas corpus, have been amply documented and could, or do, pose real threats to free speech and, by consequence, freedom of religious expression.Yet there's no good reason to believe that tax inspectors have been commissioned to freeze free speech in churches. The IRS does not release names of congregations it investigates, and too few of those names are known to substantiate a meaningful case that church investigations are ideologically driven. Furthermore, almost all the churches on that short list are conservative, and surely some other liberal churches would identify themselves with All Saints, if a number were being hounded. (Only one church has ever been stripped of nonprofit status for campaign intervention, for a violation so egregious it almost sounds like parody.On Election Day in 1992, the Church at Pierce Creek in Binghamton, New York, placed a full-page advertisement in USA Today stating that, because Bill Clinton supported legal abortions, the homosexual lifestyle, and giving free condoms to teenagers in public, anyone who voted for him would go to hell, and soliciting tax-deductible contributions to pay for the ad.) Still, conversations at All Saints are wrapped with tentacles of gossip and speculation about why this church was singled out. Bob Long, a retired attorney who serves as All Saints' senior warden (the head of the governing body of the parish), says that "a New York Times reporter" told him "they chose you because they knew you'd fight, which would create the chance for the Right to eliminate the restrictions on campaign activity altogether." The reporter thought that "sounded exactly like Karl Rove."Long adds that the church supports the tax code "exactly as it is," and grimaces when naming "some of the allies we've attracted"-such as Representative Walter Jones, a Republican from North Carolina who has been crusading to strike the ban against inferential political endorsements for several years.Jones, the congressman who suggested in 2004 that French fries in the House cafeteria should be renamed "freedom fries," is the primary sponsor of the "Houses of Worship Free Speech Restoration Act," a bill that would amend the Internal Revenue Code to protect churches from losing tax-exempt status because of the "content, preparation, or presentation of any homily, sermon, teaching, dialectic, or other presentation made during religious services or gatherings," and "permit church leaders to express personal views on political matters or elections" during church services.Senator Lyndon Johnson slipped the ban on endorsements into the tax code as a floor amendment in 1954. Previously, Jones explains, "there was no restriction on free speech in houses of worship, and Johnson had no intention of doing so." Johnson was actually trying to silence tax-exempt nonprofit groups that were campaigning against him in Texas, with funding from the powerful H.L. Hunt family.The statute is also incredibly difficult to enforce. Because churches commonly act in ways that effectively endorse or oppose particular candidates, it's practically impossible to avoid discretionary administration of the law. And although the IRS recently added more agents and dedicated a program to ensure compliance, it still depends wholly on outside sources to report infractions.The most popular arguments for reform, though, are less practical and more sweeping. Richard Land, the president of the Southern Baptist Convention's Ethics & Religious Liberty Commission, said he considers "IRS regulations restricting the free speech of churches and ministers a violation of the first amendment. I would scrap them altogether."Land, who is also a friend and advisor to President Bush, added, "And if they are scrapped I would just as vigorously encourage Southern Baptist pastors not to endorse candidates." Political endorsements from the pulpit, he said, "identify pastors in a partisan way, and they are trying to minister to all people."On the spirit of that last point, and maybe that alone, conservatives like Land actually are in full accord with All Saints. Early one morning in his office at the church, Bacon delivers his interpretation of the debate: "You simply cannot be a person of faith without being involved in politics. That's what distinguished the prophets. That is what distinguished Jesus. That is what distinguished Muhammad. These people knew that their relationship with God could not be separated from their relationship with other people and the social world. And that's very different from partisanship. That's been the biggest issue that we've had to teach our people here."Why should partisanship be the limit of political involvement for a church?His answer, like Richard Land's, is theological: "Your relationship with a party or with candidates begins to say something about your identity that is more powerful than your relationship with God."

For churches, whose mission is to serve all people, regardless of political beliefs, partisanship compromises theological identity; but so does American citizenship. Regulating churches' tax-exempt status may impinge on free exercise of religion in this country-but that threat is nothing compared to the danger of tax-exemption itself.The theologian Stanley Hauerwas of Duke Divinity School argues that exemption "lets the churches assume that they're free, that their speech doesn't cost them anything. Any speech that's 'free' is costly. On the whole, I think we'd just be better off if the churches were taxed as a way to remind ourselves that Caesar wants it all."Freedom from taxation is the bedrock of a system of soft patronage that nurtures a reciprocal dependency of church and state, as described by Diana Henriques in a series of New York Times stories last fall. Churches also enjoy exemption from fair-labor laws and other regulations, as well as zoning preferments, tax-free bonds for building projects, and permits to operate gyms and other facilities tangentially related to ministry, tax-free. Bacon says that All Saints steers clear of most of these entanglements, but still believes religious organizations should be tax-exempt because, "in order for American democracy to work, there must be a very strong moral debate." Churches, he says, "bring a unique argument to moral issues, and those arguments must be strengthened, must be encouraged. Churches need to have certain resources: you need to have buildings, you need to have land."Hauerwas finds this all unconvincing. "I wish they'd say: 'We're going to pay taxes. We're not going to give you all this 'free speech' shit,'" he said. "That would be a powerful witness to their position. They think these are some serious matters? Are they willing to pay for it? That would be a terrific sign of their integrity."Then Hauerwas postulates that, even if All Saints gave up its tax-exempt status, consistency of witness might compel the church to refuse to pay taxes, to protest funding the war they denounce. "You might have to go to jail," he mused. "They might seize your property. That would be an interesting result, I have to say."Ending tax-exemption for churches could probably be devastating for All Saints, even without the drama that Hauerwas imagines. Donations to the church would no longer be deductible, and so would likely plunge. (Churches with wealthy memberships would pay a bigger price than poorer churches, since the vast majority of Americans do not itemize deductions.) And property taxes alone, on this piece of prime real estate in the downtown heart of one of L.A.'s richest suburbs, could easily come to six figures per year.On the sofa in his office, Bacon uncovers the roots of his rationale for keeping churches tax-free. "It's more of a patriotic stance than a theological stance," he ex-plains. A white truck working on a renovation of city hall across the street backs up, beeps, and drags a pale beam of reflected light across his face. "Or, it starts with my patriotism, rather than my religion." We all choose our poisons.
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