On Sept. 28, 33 pastors around the nation participated in Pulpit Freedom Sunday, an initiative designed to challenge a 1954 amendment to the Internal Revenue Code (IRC) that prohibits religious organizations and charities from supporting or opposing candidates for political office. The Alliance Defense Fund (ADF) released a list of the pastors who participated in hopes that the Internal Revenue Service (IRS) will investigate the churches. The action generated controversy, with Americans United for Separation of Church and State (AU) filing complaints against seven of the participating congregations.

In May 2008, ADF, a conservative legal alliance, announced Pulpit Freedom Sunday to encourage pastors to intentionally violate federal tax law by endorsing a political candidate from the pulpit. Organizations that are tax-exempt under section 501(c)(3) of the IRC, which include religious organizations, can lose their tax-exempt status if they engage in prohibited partisan electioneering. ADF is hoping to challenge the ban on pulpit electioneering in federal court and is providing legal assistance to participating congregations.

Three former high-level IRS officials, including Marcus Owens, an attorney with Caplin & Drysdale, and a former IRS Exempt Organizations director, filed an ethics complaint against ADF with the IRS, asserting that ADF's actions surrounding Pulpit Freedom Sunday violate Circular 230, which governs attorney practice before the IRS. The complaint also asks the IRS to investigate ADF's tax-exempt status due to the group's role in organizing Pulpit Freedom Sunday.

BNA (subscription) reported that on Sept. 17, Michael Chessman, director of the IRS Office of Professional Responsibility, sent a letter acknowledging the complaint and saying the IRS has agreed to "review this information carefully and give it all due consideration." Sen. Charles Grassley (R-IA), the ranking member of the Senate Finance Committee, told Iowa reporters prior to Pulpit Freedom Sunday, "A minister ought to be able to speak politically just like anybody else can. The only thing that I would say, he can't use the resources of a church or a nonprofit organization for political purposes."

ADF believes that the initiative protects religious organizations' speech rights. According to an ADF press release, the organization will fight any attempt the IRS makes "to remove a church's tax-exempt status because a pastor exercised his constitutional right to engage in religious speech from the pulpit. The goal is to have the Johnson Amendment [the 1954 amendment to the IRC that prohibits religious organizations from engaging in partisan electioneering] declared unconstitutional."

But there is no consensus in the religious community on this issue. Rabbi Jack Moline, chairman of the Interfaith Alliance board, told the Washington Post that "a sanctuary should not be a place of political agitation on behalf of a candidate. On behalf of issues, yes. Of candidates, no." Also, two Ohio pastors, the Rev. Eric Williams and the Rev. Robert Molsberry, asked clergy to preach about the benefit of the separation of church and state on Sept. 21. The Ohio pastors led a group of 55 religious leaders who filed a complaint with the IRS asking the agency to force ADF to stop encouraging pastors to violate federal tax law on Pulpit Freedom Sunday.

AU filed IRS complaints against six congregations the day after their pastors endorsed candidates from the pulpit. Five of the six pastors in question openly endorsed Sen. John McCain (R-AZ). The sixth pastor did not mention McCain, but he did criticize Sen. Barack Obama (D-IL), stating, "According to my Bible and in my opinion, there is no way in the world a Christian can vote for Barack Hussein Obama. Mr. Obama is not standing up for anything that is tradition in America." AU later filed a complaint against a seventh church in which the pastor told congregants that Christians should vote for McCain.

Many organizations believe that it is especially important to investigate Pulpit Freedom Sunday to ensure that the IRS does not create the perception that the agency only initiates investigations against activities and speech that it strongly disagrees with. An Alliance for Justice statement on the matter noted that "while the necessity of this tax law prohibition is often up for debate, the equal enforcement of the law is not." In addition, a new OMB Watch commentary notes that the IRS investigated All Saints Episcopal Church of Pasadena, CA, although there was no endorsement or opposition to a candidate in that case. The agency concluded, "The IRS found that a 2004 All Saints' anti-war sermon violated the prohibition on intervention in elections…Inaction by the IRS would also encourage others to willfully violate the IRS' prohibition."

Recent surveys also indicate that the American public supports the ban against partisan electioneering. According to an article by the Pew Forum on Religion and Public Life, "While a strong majority of Americans support religion's role in public life, a solid majority also expresses opposition to churches coming out in favor of particular political candidates."

Efforts to rescind the electioneering ban have also been criticized because they would allow religious organizations to engage in partisan politics at taxpayers' expense. Critics believe allowing churches to engage in partisan political activity would also create a disparity between religious and non-religious nonprofit organizations by giving religious groups greater speech rights. Groups in support of the efforts believe that the ban inhibits religious organizations' ability to speak about the moral and social issues of the day, even though the prohibition only applies to partisan support or opposition of a candidate, not genuine issue advocacy.