Monday, September 24, 2007

California church off the hook - IRS punts

All Saints Church in Pasadena, California had been under an IRS investigation since a 2004 sermon sparked the agency to investigate whether the church had violated the prohibition on electioneering in the presidential race. The IRS has reportedly dropped the investigation, but has told All Saints in a letter that it still believes the church has violated the law. Unfortunately, the IRS is not willing to share with All Saints, or anyone else in the regulated community for that matter, why it is taking that stand.

This is frustrating. An IRS investigation is - and I'm sure the church leaders would agree - nearly as bad as being found in violation. It is invasive, expensive and irritating. After all the church went through, it is apparent that the IRS would investigate on these facts again, but would presumably not find a violation? If the IRS is intent on helping the nonprofit community follow the law, it has to give us better guidance than "facts and circumstances" standards and a handful of hypotheticals in a fact sheet.

UPDATE... more from the AP via The Washington Post.

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