alt_religion_scientology/FACTNetARS19980106

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Subject: Could your religion excommunicate you or turn you over to the IRS due to your tax noncompliance? The IRS's secret deal with Scientology.

Date: 1998/01/06

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Members of religious faiths in the United States should be alarmed about

a secret deal between the IRS and a controversial "religious"

organization called Scientology. The deal calls into question the

separation of church and state and whether powers of the state are to be

used to effect religious decisions, or vice versa. Last week, the Wall

Street Journal disclosed the 76-page, 1993 agreement through which

Scientology benefited from a lucrative tax settlement and agreed to

enact internal changes within its organization.

One of these changes was the creation of an internal oversight committee

of high-level church officials to monitor the organizationÂ’s compliance

with tax laws and to report annually to the IRS for three years, a

seemingly appropriate action. However, the committeeÂ’s jurisdiction

quickly projected beyond monitoring ScientologyÂ’s organizational tax

compliance to monitoring the tax compliance of ScientologyÂ’s individual

constituents.

After Scientology concluded its deal with the IRS, it set in motion

numerous internal religious policy changes. Some of those changes were

recently uncovered by the Public Research Foundation in an official

Scientology document. This document, a "Scientology Policy Directive"

entitled "PERSONAL INCOME TAXES" written by an unidentified "Tax

Compliance Officer" for Scientology, requires ministers and staff of

every Scientology "church" and mission to enforce compliance to IRS

regulations on individual parishioners. In part, it says that a

Scientologist who fails to comply with all IRS regulations "will be

ineligible for Church services until the matter is rectified."

To put teeth into the enforcement, the church tax directive goes so far

as to threaten non-compliers with excommunication from their religion.

Ordering parishioners to abide by IRS edicts, the directive concludes,

"Who would want to risk his eternity for any amount of money?" When a

parishioner challenged the constitutionality of the church/state union,

high-level church official Lyman Spurlock responded by writing to the

parishioner, "Were I you, I would weigh... the IRS versus your future

for eternity. If you insist on your current course you will not ever be

eligible for training and processing [Scientology church services] and

that is very unfortunate for you." And unfortunate it was. That

parishioner was later expelled from the church when he wouldn't knuckle

under.

Meanwhile, some interesting information regarding Lyman Spurlock

recently came to light. Spurlock co-founded Scientology's most powerful

organization, a secretive corporation called the Church of Spiritual

Technology (CST). The Public Research Foundation recently exposed in a

press release entitled, "HIDDEN TIES BETWEEN IRS AND SCIENTOLOGY

REVEALED," that Spurlock's co-founder of CST is former Assistant to the

Commissioner of the IRS, Meade Emory.

Serious questions are being raised about what influence Emory might have

had in the secret 1993 IRS tax exemption deal for CST and the lesser

Scientology corporations. While Spurlock, who is a CPA, is also a

Scientologist, Emory and the other co-founders and special directors of

CST are not Scientologists, but are tax and probate attorneys.

Meade Emory was Assistant to IRS Commissioner Donald C. Alexander.

Before that, Emory was Legislation Counsel of the Joint Committee on

Taxation of the U.S. Congress. CST operates almost invisibly behind the

panoply of church corporations it controls, but exercises final

authority over every copyright and trademark that has any connection

with Scientology. Without CST's blessing, none of the junior

corporations could operate at all.

It is CST's corporate leverage over all of Scientology and over all

Scientologists that makes the unprecedented church tax directives

possible. Another Scientologist who was expelled due to those directives

said, "This is the greatest outrage against religious freedoms since the

American Revolution. If a church can use a parishioner's hope of

salvation to make him kneel down before a vicious government agency,

then the IRS can use ANY church to hound and threaten. Who's next for a

'Tax Compliance Officer?' The Baptists? The Catholics? Church and state

are one now. My church IS the IRS."

Said one tax-watcher, "This makes all Scientology organizations 'branch

offices' of the IRS, and every Scientology minister an agent of the IRS

-- there to enforce compliance under the threat of eternal damnation.

Why else would a church have a Tax Compliance Enforcement Officer? And

what happens if a Scientology penitent needs to confess to his minister

that he fudged somewhere on his taxes?"

What would make the leaders of this controversial religion willing to

become enforcement agents for the IRS? More about the secret deal in

part from a New York Times story.

As part of the 1993 settlement, Scientology paid $12.5 million to the

federal government. Scientology also agreed to drop the lawsuits it had

brought against the IRS and IRS officials, and to stop helping church

members in similar lawsuits - over 2,200 lawsuits in all. In exchange,

the tax agency agreed to stop its audits of 13 major Scientology

organizations, dismiss tax penalties and liens against church

organizations, and grant tax-exempt status to 114 Scientology-related

entities in the United States. David Miscavige, the church's highest

ecclesiastical leader, told a gathering of members in 1993 that the tax

bill could have been as much as $1 billion.

More details of the secret deal were revealed by Tax Analysts, a

nonprofit organization which publishes information relating to federal

and state tax laws. In its Tax Notes Today newsletter, Tax Analysts

documents that ScientologyÂ’s $12.5 million payment was intended to cover

the organization's payroll, income, and estate tax bills for an

undisclosed number of years before 1993. The IRS's Exempt Organizations

Technical Division had been "instructed not to review the exemption

applications filed by the Church of Scientology and its affiliates for

compliance with IRC 501(c)(3)."

The IRS canceled payroll taxes and penalties, as well as liens and

levies, which it had assessed against church entities and officials. It

also dropped its audits of the mother church, the Church of Scientology

International, and 12 other Scientology organizations. The Service also

agreed not to audit the church for any year before 1993 and dropped its

litigation in pursuit of church records.

The agreement, which was signed on October 1, 1993, represented a

mysterious reversal for the tax agency. For 25 years, the agency refused

to provide Scientology with the tax exemption given to bona fide

churches. The IRS contended that Scientology operated as a for-profit

business that enriched some church officials. And the IRS found that

Scientology had mounted an aggressive campaign against the revenue

service and individual agency officials. In fact, the FBI discovered in

a raid on Scientology's headquarters that Scientology had bugged IRS

meetings where Scientology tax status was discussed.

In a newer intimidation campaign first described last March in The New

York Times, private detectives dug into the backgrounds of IRS

personnel, and the church helped finance an organization of IRS

whistle-blowers. Former long-time members of Scientology believe that in

addition to the filing of 2,200 harassment suits on the IRS, Scientology

infiltrated the IRS and intimidated or bribed key IRS decision-makers.

Many believe that the scope of what was given away by the IRS to

Scientology, both in financial benefit and other special considerations,

is far beyond what has been given to any other religious group.

END

What you can do about dangerous intrusion of state powers into religion:

1. Forward this alert to all individuals and organizations that have an

interest in seeing that this secret IRS deal is reviewed.

2. Personally write the Commissioner of the IRS, Charles O. Rossotti,

and ask him to open an investigation into this secret agreement that

pierces the separation of church and state. E-mail the commissioner at

http://www.irs.gov/help/article/0,,id=97181,00.html [Be sure to address it

to him by name.]

3. Learn more about the issues:

For more information on Scientology's secret deal with the IRS, see

http://www.factnet.org/Scientology/dianetics.html

For more information on Scientology's controversial religious status,

see

http://www.factnet.org/Scientology/scirelg.htm

For more information on Scientology's history of intimidating critics

and adversaries into submission, see

http://www.factnet.org/Scientology/adversa.htm

The PUBLIC RESEARCH FOUNDATION may be contacted here:

HCR 38, BOX 66

LAS VEGAS, NEVADA 89124

PHONE: 702-873-2343

FAX: 702-873-2115

E-MAIL: prf@mailcity.com