The Internal Revenue Service (IRS) has closed two investigations into accusations of illegal partisan electioneering by two religious organizations. The IRS determined that the United Church of Christ (UCC) did not violate its tax-exempt status by inviting Sen. Barack Obama (D-IL) to speak at the denomination's national meeting in 2007. The IRS also found Pastor Wiley Drake's endorsement of Mike Huckabee to be a personal endorsement and not made on behalf of his church, the First Southern Baptist Church in Buena Park, CA. The IRS concluded the two investigations relatively quickly, compared to cases from the previous two election cycles.

All 501(c)(3) organizations, including religious organizations and charities, are prohibited from supporting or opposing candidates in elections. This includes endorsing candidates, making donations to their campaigns, or distributing statements for or against them. There are no set rules that define what is and is not allowed, although the IRS released guidance in a 2007 Revenue Ruling.

The IRS began investigating the UCC in February following a complaint regarding Obama's speech to 10,000 people at the church's General Synod in Hartford, CT, in June 2007. On Feb. 26, the UCC publicly released a letter from the IRS announcing the agency had launched a church tax inquiry. At the time of his appearance, Obama was a candidate for the Democratic presidential nomination. The IRS was also concerned that Obama volunteers staffed campaign tables to promote the campaign outside the center where Obama spoke. However, after the UCC responded to the inquiry, the IRS found the church took the necessary steps to avoid any appearance that Obama's participation in the meeting was an endorsement of his candidacy. Their letter stated, "The activity about which we had concern did not constitute an intervention or participation in a political campaign in violation of the requirements of section 501(c)(3)."

According to the IRS letter, several factors led to the agency's determination, including:

• The invitation to Obama was issued in May 2006, before he announced his candidacy for president
• Obama was invited to speak in a non-candidate capacity about how his personal faith connected with his public life
• The UCC told those in attendance that Obama was there as a member of the church and not as a candidate for office and that the audience should not engage in any political activities
• The church's legal counsel advised the campaign of the rules for his speech
• Campaign volunteers set up tables near the entrances of the Hartford Civic Center, on public property and outside the control of the synod
• The UCC's website provides a link to the IRS fact sheet on Election Year Activities and the Prohibition on Political Campaign Intervention for Section 501(c)(3) Organizations, and the UCC Nationwide Special Counsel advised UCC leaders about Revenue Ruling 2007-41

The IRS did not notify the UCC of the investigation until six months after the speech. UCC counsel Donald C. Clark told the Washington Post On Faith column, "Congress should require that the service communicate with the church before an inquiry, with its attendant costs and chilling effect on constitutionally protected associational rights, is launched. However, that currently is neither a Congressional mandate nor IRS practice, and was not done in this case."

Experts questioned the need for the investigation when it was announced. Attorney Gregory L. Colvin, an expert on tax law and exempt organizations at Alder & Colvin in San Francisco, told Tax Analysts on May 22 that the UCC case illustrates the difficulty the vague facts and circumstances standard creates for charities and religious organizations. He said, "We still need better guidance from the Service that organizes the relevant facts and circumstances into an analytical framework. Which factors are fatal and which are exculpatory? Which create a presumption of intervention and which may rebut such a presumption? And how do those factors mesh with rules of the Federal Election Commission that regulate the same behavior?" Americans United for Separation of Church and State Executive Director Rev. Barry Lynn released a press statement saying, "We looked into the situation and did not see a violation of IRS rules. We saw no evidence of UCC officials seeking to appear to endorse his candidacy."

Another IRS investigation into possible partisan electioneering was also closed with no finding of a violation. Pastor Wiley Drake of the First Southern Baptist Church in Buena Park, CA, announced that the IRS cleared him of any unlawful activity for endorsing Republican presidential candidate Mike Huckabee. In August 2007, Drake issued a press release on the church's letterhead that announced his endorsement of Huckabee, asking all Southern Baptists to support the candidate. He also announced his endorsement on his Internet radio show. Americans United for Separation of Church and State (AU) filed a complaint with the IRS about Drake in August 2007.

Drake released the IRS letter May 12. It said the IRS found that Drake's endorsement was made as an individual and not on behalf of his church. The news release endorsing Huckabee listed his church position only for identification purposes. The IRS letter states, "The press release was sent from Rev. Drake's personal email account and sent to personal acquaintances and was not sent to any of the church's congregants. [...] and no church resources were utilized in preparing or sending the email. Additionally, the Wiley Drake Show is a separate entity.... The church does not own, financially support, sponsor, or have any legal rights to the Wiley Drake Show."

AU, disappointed with this outcome, commented in a blog posting, "There are some gray areas in federal tax law, but the bottom line remains the same: Pastors who choose to cross the line into politicking may get away with it or they may not. They must ask themselves if it is worth risking their tax exemption to endorse some candidate."

Drake was represented by the Alliance Defense Fund (ADF) and is part of their "Pulpit Freedom Sunday" initiative, which is encouraging pastors to preach about politicians on Sept. 28 in a manner that could spark an IRS investigation. ADF hopes an investigation will lead to a lawsuit challenging the ban on partisan electioneering.