Tax the Cult of Scientology

“The 'establishment of religion' clause of the First Amendment means at least this: Neither a state nor the federal government can pass laws which aid one religion, aid all religions, or prefer one religion over another.”

-Justice Hugo Black, United States Supreme Court

Scientology is tax-exempt in the United States?

The cult's founder, L. Ron Hubbard, using a crude lie detector on a tomato plant

Currently yes, although it has been revoked in the past as it has fallen into the category of a commercial enterprise. One of the most important aspects of the global protests against the Church of Scientology has to do with its tax-exempt status, including the methods by which it was obtained, the details of the agreement that led to their exemption, and several instances where the tax-exempt status they received is in violation of the United States Constitution.

Does Scientology deserve its tax-exempt status?

By all accounts, no. Scientology is structured more like a business than a church, and is recognized purely as a commercial enterprise outside of the United States. Unlike other religions Scientology charges for information on everything pertaining to its teachings.

Walk into a mosque, church or synagogue and ask about Islam, Christianity or Judaism and you will receive answers, free of charge or strings. Walk into a Scientology Org and ask about their religion and you will be asked to take a 'Free Personality Test' where they will likely find many things 'wrong' with you, all of which can only be 'cured' by Scientology's teachings, which are described in books and classes you have to buy. And it's not cheap by any means.

Scientology charges its members tens to hundreds of thousands of dollars for classes, books, auditing sessions, and everything else they need to advance through the ranks of Scientology. Anyone with eyes can see their organization is structured like a pyramid scheme, not a non-profit entity like a religion.

What is Scientology's Tax History?

First, we need go back to the early 1950s. At that time Scientology was administered by the Hubbard Association of Scientologists (HAS), which was established in Arizona on September 10, 1952. The first organization to take on the name of "The Church of Scientology" was incorporated later, on December 18, 1953 in Camden, New Jersey. At this same time, Hubbard also incorporated two other "churches" under the names of The Church of Spiritual Engineering and The Church of American Science. However, all three of these organizations were soon abandoned.

They were replaced by "The Church of Scientology" on February 18, 1954. But only a few short years later, in 1956, this organization changed its name to "The Church of Scientology of California" (CSC). It's a long and very confusing progression, leaping from one business name to another, pulling together a vast network of seemingly unrelated tax-exempt organizations spread throughout the United States.

In 1966, Hubbard transferred all of his assets to the CSC, at long last gathering Scientology under one tax-exempt roof. However, the IRS soon caught up with this helter-skelter conglomeration of organizations. In 1967, the IRS stripped all US-based Scientology entities of their tax exemption, declaring that Scientology's activities were commercial and operated purely for the financial benefit of Hubbard.

How did the Church of Scientology gain their tax-exempt status?

Hubbard and his many organizations sued the IRS and lost repeatedly for twenty-six years trying to regain their former tax-exempt status.

Many internal documents and personal testimonies from former upper-level Scientologists have stated that the continuous volley of lawsuits was a calculated effort to exhaust the IRS into submission. By 1991, the IRS was facing a mountain of litigation. Scientology has claimed to have had as many as 2500 active suits against IRS and its individual employees.

Aside from lawsuits, they placed their members within the IRS as agents of infiltration to obtain exploitable information they could use against the IRS and other federal agencies. They also hired private investigators to dig up dirt on high-ranking IRS employees.

After decades of this, in 1991, Scientology's spiritual leader, David Miscavige, arranged a meeting between himself and Fred Goldberg, then Commissioner of the IRS. In that meeting, secret agreements were made that ultimately fell in Scientology's favor.

This was followed by a two year review process by the IRS of Scientology, where IRS agents were ordered to ignore Scientology's multiple questionable policies and history of legal violations. In 1993, a payment was made by the Church of Scientology to the IRS, totaling $12.5 million dollars, substantially less than the IRS had initially demanded. In addition to that one-off payment, Scientology dropped all major lawsuits they had filed against the IRS. In exchange for this, the church's tax exemption status was reinstated.

Does Scientology enjoy this tax-exemption in other countries, or just the United States?

Belgium, Canada, France, Germany, Greece, Israel, Russia, the United Kingdom have rejected Scientology's applications for tax-exempt, charitable status or recognition as a religious organization.

Only the United States and Australia allow the cult this special status.

Do other churches enjoy tax-exempt status in the United States?

Not in the same way that the Church of Scientology does. One of the special parts of the tax-exempt status that Scientology enjoys has to do with their exemption for "religious education". This means that any Scientologist can deduct their expenses for Scientology courses, auditing, and even all of the Hubbard books they buy. They are the only church that has been granted this status.

In 2004, a suit was filed on behalf of Michael and Marla Sklar, a Jewish couple who attempted to claim $15,000, which was the cost associated with the religious component of their childrens' education. The foundation of the case was the Church of Scientology's religious education tax exemption, which served as precedent for the Sklar's deduction. Inevitably, the court's decision hinged on an investigation into the religious education exemption that allows each individual Scientologist to deduct very large sums of money spent on auditing and religious education. At the heart of this case was a discussion regarding Scientology's tax exemption in relation to the Constitution's Establishment Clause.

What is the 'Establishment Clause'?

It is a clause in the First Amendment to the US Constitution, stating: "Congress shall make no law respecting an establishment of religion." One of the vital aspects to this clause's interpretation includes an explicit prohibition against the establishment of any law giving preference to one religion over another. In other words, if one specific church is going to receive a specific benefit (in this case, the religious education tax exemption Scientology enjoys) then that same benefit must be freely given to all other faiths as well. If that can't be achieved, then no individual church should receive such preferential treatment, lest the law or governmental agency find themselves in violation of the Constitution.

This means the tax-exempt status the IRS was coerced into granting Scientology is in direct violation of the US Constitution.

In response to the Sklar's claims in their lawsuit, the IRS stated that the agreement between the IRS and the Church of Scientology is private and cannot be reviewed by any outside agency. Furthermore, in their opinion, the Sklars were not entitled to receive the same benefits that members of the Church of Scientology enjoy.

The reactions of one of the judges in the case is as follows, "The view of the IRS is that it can violate the constitution by establishing religion by treating one religion more favorably than other religions, in terms of what it allows as deductions and there can never be any judicial review of that."

Why does any of this matter?

There are two primary reasons that this is an important issue:

How Can This Be Changed?

What can average, every day concerned citizens do to make our elected officials aware of this Constitutional breach by the IRS and the unjust tax-exemption Scientology enjoys? There are several things you can do to raise awareness and bring this onto the national stage.

 

Write our elected leaders

Send letters to your representatives, congressmen and the president. Use the information and sources cited here to let them know that as an American citizen and tax-payer, you will not stand for this breach of the Constitution and what is virtually government support of a corrupt, abusive organization.

Write your Representative
Write your Senators
Write the President

 

Use social websites to inform friends

Social networks such as facebook or twitter are great methods to spread awareness amongst those that might be interested. If you didn't know about this issue then there's a great chance that they don't either!

 

Petition Drives

There are several online petitions specifically focused on making the IRS review Scientology's tax-exempt status, and make Congress investigate the conditions and history of why it was granted in the first place. If this happens, it will unleash a storm as Congress reopens the cabinets of files they have on the Church of Scientology.

Stop Scientology: Online Petition at Petition Spot
View the Change.gov Petition
Printable Tax Petition

 

Postcards

A simple way for people to get involved is to create a variety of postcards focused on investigating the tax exempt status of Scientology. These would be pre-written with space for people to write their own message, sign it, and scribble down their return address. Have some addressed to the appropriate congressmen and some addressed to the President. People can either send these in themselves, or they can be all collected and sent at the same time.

 

Information Packets

Print out and distribute informational flyers regarding the Church of Scientology tax issue and the Constitutional issues involved. The more people are made aware of this disturbing breach of the Establishment Clause, the higher the level of public consciousness will be.

Printable Tax Flyer

 

Alert Taxation Watchdog Groups

Any petitions can also be sent to any and all tax watchdog groups, both liberal and conservative, to alert them to this longstanding problem to see if they can be mobilized to act as well. These groups often seem to focus on the least amount of taxation possible, but really what the majority of them are for is FAIR TAXATION, which isn't anywhere to be seen in this situation.

 

Join the Global Protest against Scientology

Visit Why We Protest for more information.

 

Relevant Articles and Source Material

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This website was designed to facilitate easy research and understanding into the unjust tax exemptions and overall lack of regulations for Scientology by governments worldwide.

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