In a recent letter to a lawyer for All Saints Episcopal Church, a top IRS official confirmed that the case is closed and the church will not be assessed a special excise tax, despite the agency's finding that the sermon amounted to illegal intervention in a political campaign.
The church, which had asked the agency for clarification on that issue and others, released the letter this week.
All Saints leaders also asked the Treasury Department, which oversees the IRS, to review what the church calls irregularities and errors in the case.
In its letter to All Saints, dated Oct. 22, the IRS agreed that a review of the high-profile case would be "appropriate."
An influential, outspokenly liberal congregation, All Saints came under IRS scrutiny after a sermon by a guest speaker on Oct. 31, 2004, two days before the presidential election.
In the sermon, the Rev. George F. Regas did not endorse a candidate.
But he criticized the Iraq war and said Jesus would have told President Bush that his preemptive war strategy there "has led to disaster."
Times staff writers K. Connie Kang and Rebecca Trounson contributed to this article.