Tax Exemptions

The Internal Revenue Service has rejected tax-exempt status for two California municipal bond issues used for a hotel and convention center. The $145.5 million in bonds were sold for the Cabazon Band of Mission Indians in Riverside County. They include $110.5 million of revenue bonds issued by the California Statewide Communities Development Authority (East Valley Tourist Development Authority-Series 2003A) and $35 million of subordinate revenue bonds issued by the same entities (Series 2003B).

U.S. Rep. Bill Thomas (R-Bakersfield) is questioning whether the NCAA, with its $521.1-million annual budget and lucrative television rights package, deserves its tax-exempt status. In a pointed, eight-page letter sent Monday to NCAA President Myles Brand, Thomas suggested that big-time athletic programs might be at odds with the purpose of higher education and might not qualify for tax-exempt status.

They are not the words one expects to hear from a politician or a Southerner, and Leonard Scarcella is both: "Our city has an excessive number of churches." Scarcella is mayor of this Houston-area community, which has 51 churches and other religious institutions packed into its 7 square miles. With some 300 undeveloped, potentially revenue-producing acres left in Stafford, officials are scrambling to find a legal way to keep more tax-exempt churches from building here.

The Internal Revenue Service is warning churches and nonprofits that improper campaigning in the upcoming political season could endanger their tax-exempt status. The agency also launched a program to expedite investigations into claims of improper campaigning, prompting an advocacy group to charge this month that the program could restrict the free speech of nonprofit groups and churches.

The Internal Revenue Service has canceled the tax-exempt status of some of the nation's largest educational credit counseling services after audits revealed they existed mainly to prey on debt-ridden customers, Commissioner Mark Everson said Monday. "These organizations have not been operating for the public good and don't deserve tax-exempt status," Everson said. "They have poisoned an entire sector of the charitable community."

Dan Schuessler didn't plan to run a small business. He has a full-time job at Intel. But the 28-year-old found a good deal on shoes one day and was convinced that he could resell them at a profit on EBay. That was two years ago. Now, in a good month, he will sell 100 pairs of men's loafers online. The moonlighting that once brought in only "pocket change" has become truly profitable, he said. With the growing popularity of online sales -- EBay boasts about 2.

Expressing concern about the 1st Amendment rights of clergy, Rep. Adam B. Schiff (D-Burbank) and two Republican colleagues called Thursday for an investigation by the U.S. Government Accountability Office into the IRS' recent probes of alleged "campaign intervention" by churches, including Pasadena's liberal All Saints Church.

All Saints Episcopal Church seems to embody staid, moneyed old Pasadena. Facing City Hall, the 80-year-old Gothic Revival church has glowing stained-glass windows by Tiffany and the local Judson Studios. But though the medieval-looking church exudes serenity and other-worldliness, the 3,500-member congregation has been speaking out on controversial issues since an All Saints rector protested the internment of Japanese Americans during World War II.

The IRS threat to revoke the tax-exempt status of All Saints Episcopal Church in Pasadena because of an antiwar sermon there during the 2004 presidential election is part of a larger, controversial federal investigation of political activity at churches and nonprofit groups.

The Internal Revenue Service has warned one of Southern California's largest and most liberal churches that it is at risk of losing its tax-exempt status because of an antiwar sermon two days before the 2004 presidential election. Rector J. Edwin Bacon of All Saints Episcopal Church in Pasadena told many congregants during morning services Sunday that a guest sermon by the church's former rector, the Rev. George F. Regas, on Oct. 31, 2004, had prompted a letter from the IRS.