The basis of Gibney’s argument has little to do with whether Scientology is a cult or a religion, and more to do with whether Scientology is really a charitable organization. Clarifying his point in a recent editorial in the Los Angeles Times, Gibney wrote:
To maintain the right to be tax-exempt, however, religions must fulfill certain requirements for charitable organizations. For example, they may not "serve the private interests of any individual" and/or "the organization's purposes and activities may not be illegal or violate fundamental public policy.”
The Church of Scientology often points to its tax-exempt status as proof that it is a recognized religious entity in the United States. And there’s no disputing that tax-exempt status has been a huge boon to the Scientology industry. With a little over 50,000 documented members, but billions in real estate holdings, the Church of Scientology has been called “the most famous small business in the world,” with its tax exempt status saving the Church an estimated $20 million a year on property taxes alone.
It doesn’t help that circumstances in which the tax exemption was granted have always surrounded in controversy. Scientology first became a religion in 1956, but was stripped of its tax-exempt status in 1967. Then began a legal battle that lasted for 26 years. The Supreme Court finally ruled for the IRS against the Church in 1991, but rather than relying on the verdict of the highest court in the land, the IRS caved two years later, granting tax-exempt status. During this period, over 2400 Freedom of Information Act Requests and 200 lawsuits were filed on behalf of Scientologists against the IRS; Gibney also notes that individual IRS agents and accountants were investigated and intimidated by private investigators. (In a note to Forbes.com, a Church of Scientology representative claims that the case was won because the Church “provided substantive proof on the merits”).
Scientology has long been accused of sharp practice, harassment, even abuse. But the highly disciplined and closed-ranks organization portrayed in Going Clear operates at a fever pitch. The take-no-prisoners attitude extends to nearly all phases of the worldwide mega-business Scientology has become.
Founder L. Ron Hubbard was against paying taxes, and famously dodged the IRS for years. The film shows his pursuit of the brass ring that an IRS church exemption would mean to his empire. After years of unsuccessful IRS exemption applications, the film says Scientology Chairman David Miscavige (who succeeded Hubbard) ordered rank and file Scientologists to file individual lawsuits against the IRS for failing to recognize it as a church.
In 1993, the IRS was literally overwhelmed by 2,400 suits and the prospect of defending itself against all of them, the IRS agreed to grant Scientology tax-exempt status in exchange for the withdrawal of the cases. Since then, Scientology has flourished, as this 2011 tax filing reveals.
There are many tax advantages of church status and an IRS determination letter. Even compared to other tax-exempt organizations, church status is the crème de la crème. For years, the IRS denied that Scientology was a church until the 2400 lawsuits caused the IRS to rule Scientology was a church. The New York Times claimed the IRS reversed 30 years of precedent to grant Scientology Section 501(c)(3) status.
Over the past few years, many have said that the IRS should reconsider Scientology’s tax-exempt status. Some claim to have seen coercive fundraising efforts, suggesting the IRS had the wool pulled over its eyes when it granted church status in 1993. The HBO film is fueling those comments, as a St. Petersburg Times series did a few years ago.
If the IRS decides to take on Scientology for round two, the bout could be noisy. Churches reap a vast array of tax advantages. They even include special rules limiting IRS authority to audit a church. A “church” is not specifically defined in the tax code, but the IRS lays out buzzwords in its tax guide for churches and religious organizations, including these characteristics:
Distinct legal existence;
Recognized creed and form of worship;
Definite and distinct ecclesiastical government;
Formal code of doctrine and discipline;
Distinct religious history;
Membership not associated with any other church or denomination;
Organization of ordained ministers;
Ordained ministers selected after completing prescribed study;
Literature of its own;
Established places of worship;
Regular congregations;
Regular religious services;
Sunday schools for religious instruction of the young; and
Schools for preparing its members.
The IRS considers all facts and circumstances in assessing whether an organization qualifies. But unlike other exempt organizations, a church need not actually apply for tax exemption. Most churches do, but it is not technically required. Now, 22 years after the IRS gave in, there are new outcries for the IRS to examine Scientology and to end its tax-exempt status.
It isn’t a far-fetched idea. The Nonprofit Risk Management Center reports that over one hundred 501(c)(3) organizations lose their tax-exempt status each year. The reasons can vary, but in the case of Scientology, many wonder how it could have collected the church status in the first place.
http://www.forbes.com/sites/robertwood/ ... ch-status/
And I would be one of them who wonder as I read about how these guys got their religion recognized by the government. Swamp the IRS with paper work and threaten them and suddenly the last group of rejections they gave to this cult is reversed because ...?
This story just makes me cringe. They should do what Chile did and officially recognize this group as a cult that it is.
