Scientology vs. the IRS
Scientology and the IRS
|From the 1990 Time Magazine article “The Thriving Cult of Greed and Power”:An Internal Revenue Service ruling in 1967 stripped Scientology’s mother church of its tax-exempt status. A federal court ruled in 1971 that Hubbard’s medical claims were bogus and that E-meter auditing could no longer be called a scientific treatment.|
Hubbard responded by going fully religious, seeking First Amendment protection for Scientology’s strange rites. His counselors started sporting clerical collars. Chapels were built, franchises became “missions,” fees became “fixed donations,” and Hubbard’s comic-book cosmology became “sacred scriptures.’
During the early 1970s, the IRS conducted its own auditing sessions and proved that Hubbard was skimming millions of dollars from the church, laundering the money through dummy corporations in Panama and stashing it in Swiss bank accounts. Moreover, church members stole IRS documents, filed false tax returns and harassed the agency’s employees. By late 1985, with high-level defectors accusing Hubbard of having stolen as much as S200 million from the church, the IRS was seeking an indictment of Hubbard for tax fraud. Scientology members “worked day and night” shredding documents the IRS sought, according to defector Aznaran, who took part in the scheme. Hubbard, who had been in hiding for five years, died before the criminal case could be prosecuted.
In 1993 The Church of Scientology was granted tax exempt status by the Internal Revenue Service.
Why did the IRS do such an abrupt turnabout? The answer is not easily discerned. The IRS and Scientology entered into a secret deal which was subsequently leaked to the press.
Controversy surrounding the secret IRS deal led to an investigation by the Treasury Inspector General for Tax Administration. This report has itself been kept hidden away from public view. While many have requested copies, so far none have been provided
The Treasury Inspector General for Tax Administration’s investigation report – ROI – Number 8-9801-0002 consists of 123 pages of records. The report concerns the IRS Inspector General investigation of the IRS Closing Agreement with the Church of Scientology, as mentioned in IRS Press Release IR-97-50, dated December 31, 1997.
Although TIGTA has thus far declined to provide a copy of this investigation report, you can submit a request for a copy of the investigation from:
Treasury Inspector General For Tax Administration
Attn: Disclosure Officer
1125 15th Street NW #700
Washington, DC 20005
Fax: 202-927-7059 or 202-927-3621
Read more about the IRS agreement:
|Jeff Jacobsen’s Essay on Scientology’s IRS status
The Shadowy Story Behind Scientology’s Tax-Exempt Status – New York Times, March 9, 1997
Intimidating the IRS – St. Petersburg Times, March 11, 1997
Editorial: Who Can Stand Up? – New York Times, March 16, 1997
The Selling of a Church, Shoring Up Its Religious Profile. The church has adopted the terminology and trappings of traditional theologies. But the IRS is not convinced.- Part 2 of the LA Times series on Scientology — June 25 ,1990
Attack the Attacker, The Battle with the I.R.S. Neither Side Blinks in a Lengthy Feud – Part 6 of the LA Times series on Scientology — June 29,1990
Public Research Foundation ReportsA series of public-domain investigative reports on ties between the United States government and Scientology.