Church Ready To Fight IRS

(CBS)  It was a fiery sermon, aimed far beyond the Sunday parishioners.

"The IRS Agents are welcome in our pews," Rev. J. Edwin Bacon says during a recent sermon, but adds, "they are not welcome in our pulpit."

The reason, CBS News correspondent Sandra Hughes reports is the Internal Revenue Service is taking on the popular and liberal All Saints Episcopal church in a fight for its very survival.

It started just before the 2004 presidential election with another sermon given by Rev. George Regas, who is retired, titled "If Jesus debated Senator Kerry and President Bush."

"Mr. President, your doctrine of preemptive war is a failed doctrine," the Oct. 31 sermon went. "My hope is that you will take into that voting booth all that you know and have learned about Jesus."

The IRS didn't like what it heard and sent a threatening letter. "Intervention in a political campaign could cause you to lose your tax exempt status,"

the letter says (video)

.

"I tried explicitly to say I'm not telling you who to vote for," Regas says. Asked if he was sorry for delivering his sermon, Regas says defiantly, "My feeling is that I would preach it again with greater intensity."

The IRS wouldn't talk specifics of the case, but says federal tax law draws a clear line between church and politics.

"Free speech is an underpinning of our democracy, but what you can't do if you want tax exemption is to lobby on behalf, or in opposition to, a particular candidate," IRS Commissioner Mark Everson says.

But parishioners question the investigation.

"I have no question it's politically motivated," says one All Saints attendee.

The IRS denies that, but the idea of government bureaucrats judging the content of America's religious sermons has outraged leaders of almost every faith.

"If the government starts supervising religious speech and supervising the press and supervising political speech, where are we? Well, welcome to the Soviet Union," says pastor Ted Haggard, head of the conservative National Association of Evangelicals.

The church says the IRS offered to back down if the church admitted guilt and apologized. The church refused, putting its faith in the freedom of the pulpit.