WASHINGTON - The Internal Revenue Service is investigating whether a speech by NAACP Chairman Julian Bond last summer that criticized the Bush administration violated a federal law that prohibits tax-exempt charitable organizations from engaging in most forms of political activity.

You can be passionate and still have a tax-exempt status. If the IRS thinks that this speech is sufficient to trigger an audit, then I think we have quite a new standard and they must be planning to audit hundreds of other groups.

Frances Hill, a University of Miami law professor

Bond said he felt the probe was politically motivated and meant to have a chilling effect on the NAACP, in particular its efforts to register black voters, who support Sen. John Kerry overwhelmingly.

Bond is wrong, IRS Commissioner Mark Everson responded.

"The IRS follows strict procedures involving the selection of tax-exempt organizations for audit and resolution of any complaints about such groups," Everson said. "Career civil servants, not political appointees, make these decisions in a fair, impartial manner. Any suggestion that the IRS has tilted its audit activities for political purposes is repugnant and groundless."

In a letter outlining the alleged violations, the IRS cited a federal law that prohibits tax-exempt charitable organizations "from intervening in any political campaign on behalf of or in opposition to any candidate for public office."

Bond, in a speech in July at the civil rights group's annual convention in Philadelphia, declared: "The election this fall is a contest between two widely disparate views of who we are and what we believe. One view wants to march us backward through history - surrendering control of government to special interests, weakening democracy, giving religion veto power over science, curtailing civil liberties, despoiling the environment.

"The other view promises expanded democracy and giving the people, not plutocrats, control over their government."

Frances Hill, a University of Miami law professor and an expert on the political rights of tax-exempt organizations, read Bond's speech and said it was indeed critical of President Bush. But she added that Bond was probably on safe legal ground because his speech was broadly conceived, didn't focus solely on Bush and touched on a range of issues that have long been trademarks of the NAACP, such as equality and justice.

"You can be passionate and still have a tax-exempt status," Hill said. "If the IRS thinks that this speech is sufficient to trigger an audit, then I think we have quite a new standard and they must be planning to audit hundreds of other groups."

If Bond's speech is found to have violated federal law, the NAACP could lose its tax-exempt status, which could severely limit its ability to attract donations.

"It would be catastrophic," Bond said. "It would mean that people who give $100 and who write it off their income taxes couldn't do it anymore."

Tax-exempt schools, churches and groups such as the NAACP are prohibited from participating or intervening in political campaigns for or against any candidate for public office.

They can't endorse candidates, donate to their campaigns, engage in fund raising, distribute statements or become involved in any other activities that may help or hurt any candidate. Even activities that encourage people to vote for or against a particular candidate on the basis of nonpartisan criteria violate the political-campaign prohibition of the federal tax code.

Bond acknowledged that his wide-ranging speech was critical of Bush. But he said the criticism wasn't done in support of Kerry, who accepted an NAACP invitation to speak at the group's convention after the president turned the group down.

"It is Orwellian to believe that criticism and partisanship are the same thing," Bond said. "It's just unbelievable that criticizing the president would bring the weight of the IRS down on you. ... We think every American, no matter what political party they belong to, ought to be outraged by this."

Bond said the NAACP board of directors had voted to fight the IRS allegations. The group, based in Baltimore, has until Nov. 5 to respond to the charges in writing, he said.

In a separate action, the IRS warned clergy Thursday that if they ask God to grant President Bush four more years as president during their services, they're risking their tax-exempt status.

The Christian Defense Coalition, a Washington-based group that opposes abortion, had asked the agency to clarify that question.

The Rev. Patrick J. Mahoney, the coalition's director, said the IRS ruling was tantamount to censorship.

"Churches should be allowed to pray according to the teachings of Scripture and the dictates of their conscience," Mahoney said, "without government intimidation or harassment and regardless if that prayer is offered for President Bush, Senator Kerry or any other candidate."

Another group, Catholics for a Free Choice, has asked the IRS to rule on whether Roman Catholic groups that oppose abortion can keep their tax-exempt status if they urge voters to oppose Kerry. The IRS hasn't yet responded to that query.

© Copyright 2004 Knight-Ridder

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