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IRS drops inquiry into Warroad church

The Rev. Gus Booth, pastor of Warroad (Minn.) Community Church, gives a sermon in June 2008.

The Internal Revenue Service has halted its investigation into a Minnesota pastor who preached his politics from the pulpit in violation of his church's tax-exempt status, and the minister says he's disappointed because he'd rather fight it out in court.

However, the IRS held out the possibility of reopening the matter later, which might give the Rev. Gus Booth of Warroad Community Church another shot at getting an IRS rule declared unconstitutional.

Booth said Wednesday he believes a section of the Internal Revenue Code that prohibits tax-exempt organizations, including churches, from supporting political candidates violates the First Amendment freedoms of speech and religion.

"I just think it's important that a pastor inform their congregation who's the most biblical candidate or officeholder," Booth said by phone from the northwestern Minnesota city of Warroad.

However, the Rev. Barry Lynn, executive director of Americans United for Separation of Church and State, said the IRS rule is "perfectly reasonable" because it applies to all nonprofits, religious and secular, and saves them an enormous amount of money in exchange for their not endorsing candidates.

"To eliminate this provision for churches would open up a giant new loophole in legitimate campaign finance rules that include being able to see where money or support for candidates comes from," Lynn said.

Booth was one of six pastors throughout the U.S. who were subjects of complaints filed last September by Americans United. Americans United learned from media reports that the six were part of a national protest organized by the Alliance Defense Fund, a conservative legal group that opposes the rule.

Erik Stanley, senior legal counsel for the Arizona-based group, said 33 pastors in 22 states participated in the Sept. 28 Pulpit Freedom Sunday. He said they all sent the IRS copies of their sermons testing the ban. The IRS never went after any of them for those sermons, Stanley said.

Booth was investigated instead for a sermon he gave in May 2008 against Democrats Barack Obama and Hillary Clinton. Booth said he sent the IRS and Americans United letters to make sure they knew it about it.

In its letter to Warroad Community Church, the IRS said it was dropping its investigation "because of a pending issue regarding the procedure used to initiate the inquiry."

It held out the possibility that it could reopen the case "after it resolves that procedural issue."

IRS spokeswoman Nancy Mathis would not comment on why the IRS dropped its investigation of Booth or on the status of the cases against the other pastors. She said federal law precludes the agency from commenting on information about taxpayers.

Booth said he believes the IRS knows it would lose on constitutional grounds.

"I just basically believe that they realize that their law is unconstitutional so they don't really want to fight," he said.

However, Lynn said he believes the IRS backed off Booth because of a federal judge's ruling in another case involving a different Minnesota pastor.

In that case, Judge Ann Montgomery ruled in January that Living Word Christian Center in Brooklyn Park did not have to comply with an IRS summons for an investigation into whether the church had violated its tax-exempt status through allegedly improper financial dealings with its senior pastor.

The judge said that the IRS' investigation had not been authorized by a high-enough official at the Treasury Department. The decision didn't specify who would be the "appropriate high-level Treasury official" required under the Internal Revenue Code.

"We're working the issue, and we hope to have it resolved soon," Mathis said of that case.