The 2008 presidential campaign is in full swing, and so is the debate over what charities and religious organizations can say or do without violating the tax code's ban on partisan electoral activity. The Internal Revenue Service (IRS), which enforces the law through its Political Activities Compliance Initiative (PACI) program, has already received numerous requests for investigations, and one church has challenged it to investigate a 2006 sermon. The controversy reflects a healthy interest in public affairs within the nonprofit sector, as well as an unhealthy uncertainty about what is allowed in many election-related activities.

The Texas Freedom Network (TFN), a government watchdog group that promotes religious freedom, has asked the IRS to investigate whether a private foundation, the Niemoller Foundation, improperly funded the Texas Restoration Project's efforts to mobilize members of conservative Christian churches in Texas to support Gov. Rick Perry's (R) reelection campaign in 2006. According to the TFN press release, the Texas Restoration Project held six "Pastors' Policy Briefings" in 2005 with "thousands of pastors and their spouses" present "at a time when Republicans Sen. Kay Bailey Hutchison and state Comptroller Carole Strayhorn were considering seeking their party's nomination for governor. They sponsored a seventh event to celebrate Gov. Perry's inauguration in 2007. Gov. Perry spoke at all seven 'briefings.' No other candidates or potential candidates for governor in 2006 received invitations to speak."

The TFN press release also states that "before the gubernatorial election in November 2006, the Texas Restoration Project sent e-mails to pastors on its mailing list, encouraging them to participate in a statewide conference call . . . to 'discuss what we can do this election cycle to motivate our pews to vote their values.'"

Similar initiatives are occurring elsewhere, modeled after the Texas Restoration Project's efforts. For example, the Florida Renewal Project planned a series of "pastors' policy briefings" in advance of Republican primaries in several states, including South Carolina, California, and Florida. The South Carolina Renewal Project and Iowa Renewal Project have also hosted speeches by Republican presidential candidate Mike Huckabee, and he is the only presidential candidate to speak at any of the pastors' briefings. In a 2007 Revenue Ruling, the IRS made it clear that charities and religious organizations must give all candidates an equal opportunity to appear at events they sponsor.

In another allegation of partisan activity, Americans United for Separation of Church and State (AU) has asked the 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.'" Obama's appearance occurred six days before the Nevada caucuses. Pastor Leon Smith told the congregation, "If you can't support your own, you won't get anywhere. . . . The more he [Obama] speaks, the more he wins my confidence, and . . . if the polls were open today, I would cast my vote for this senator." Whether or not these statements amount to an endorsement that violates the law depends on how the IRS interprets the "facts and circumstances" test of the case.

After numerous accusations of improper partisan activity, one church has decided to challenge what it feels are unnecessary and mistaken IRS constraints on pastors. The Calvary Assembly of God Church, in Algoma, WI, ran an advertisement in The Wall Street Journal written in the form of an open letter to the IRS declaring, "We're writing today to call your bluff," challenging the IRS to investigate the church and a November 2006 sermon for possible campaign intervention.

The ad was paid for by the Becket Fund for Religious Liberty, an interfaith, public-interest law firm. The Becket Fund's National Litigation Director said the law firm is basing its legal arguments on the church autonomy doctrine, which 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. The Becket Fund's press release argues that "clergy speaking to their congregations is not the same as a church, as a legal entity, endorsing a candidate." The press release also has a video of the sermon in question.

The letter references the All Saints Episcopal Church case that ended without the church losing it tax-exempt status despite an IRS finding 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."

AU 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."