An Episcopal church in California invited a guest speaker to preach a sermon during a worship service on the Sunday before the 2004 presidential election. The guest speaker's sermon was entitled, "If Jesus Debated Senator Kerry and President Bush." The sermon allegedly was critical of various policies of President Bush, including the Iraq War and poverty relief. It was later posted on the church's Internet website.
The tax code prohibits churches from "participating or intervening" in any political campaign on behalf of, or in opposition to, a candidate for public office. The IRS launched a two-year examination of the church's campaign activities. It issued a letter to the church on September 10, 2007 in which it concluded that the church had violated the tax code's ban on campaign intervention. However, the IRS pointed out that "this appears to be a one-time occurrence and that you have policies in place to ensure that the church complies with the prohibition against intervention in campaigns for public office." As a result, the IRS elected not to revoke the church's tax-exempt status.