Originally published on Forbes.com.
It is in the news that President Trump would like the IRS to go after Scientology. I’ve done my best to trace back the reports and as far as I can tell the core story originates with Yashar Ali on Huffpost. The essence is that actress Leah Remini, who is a something of an anti-Scientology activist, was told by Lynne Patton, a Trump family retainer, who now heads Region II (which includes NYC) of HUD, that she (Patton) intended to contact the IRS about revoking Scientology’s tax-exempt status.
Is This An Actual Story?
You have to understand, I am a contributor to Forbes.com and my ability to contribute is mainly based on my thirty-five years of experience in public accounting with a heavy tax emphasis and obsessive reading of tax decisions and rulings and the like. I say that because it means that I am not a real journalist. We, contributors, do, however, get some guidance to bring us along the path of journalism. I have to say that had I been in Mr. Ali’s shoes, I would be asking my editors if there were an actual story there.
On the other hand, I want to empathize with Mr. Ali. Given what I have received when I have dared to write about Scientology, I imagine the vitriolic nastygram he will get from the Scientology lawyers will have to be handled with asbestos gloves.
The Al Capone Syndrome Again
Nonetheless, with the IRS Scientology exemption back in the news, I think it would be worthwhile for me to revisit the issue. Fundamentally, the IRS taking on Scientology is a very bad idea. It comes out of what I call the “That’s how they got Al Capone syndrome”. Scientology has purportedly been responsible for nasty stuff. If that is true go after them for the nasty stuff. Sending accountants, even ones who are armed and have arrest powers, is not the best response. And frankly, the ranks of those men and women are dwindling in the face of the stupidest economizing Congress has ever conceived.
More to the point, Scientology probably is a religion. Are there con artists using Scientology to exploit people without actually believing in it? Just for the sake of argument, let’s assume that there are. What does that make Scientology look like? It makes it look like Christianity (and Islam and Buddhism and on and on).
]Does the Scientology belief system sound like something that a bad science fiction writer would come up with? I would never say that, but again for the sake of argument, assume it is true. I was raised Catholic and my covivant was raised in a kind of secular Judaism- Judaism without Yahweh – People back then were not smart enough to know pork was bad for them, so they made it a religious thing- stuff like that. When I explain basic Christian teaching to her – God loves people so much that rather than torture them forever like they deserve, he had his son tortured for them – she thinks that it is insane. Whatever mishegas Scientology might have would not be less plausible.
So here is a guide to the last time we refought the IRS Scientology Thirty Years War on this platform.
I Start With Katie Holmes
It was stories about the Katie Holmes Tom Cruise divorce that got me interested in the Scientology IRS struggle. I knew from my reading that Scientology cases are frequently cited, but it did not seem that there was anything going on currently. I discovered that that was because there had been nearly twenty years of peace after a veritable Thirty Years War between the two organizations.
If Katie Holmes Has A Problem With Scientology – So Did IRS Until 1993
Why I Think Scientology Is A Church
In this post, I lean on Professor Edward Zelinsky to discuss what makes an organization a church. I had the pleasure of meeting Professor Zelinsky this week at a conference at Yeshiva University School of Law dedicated to his recent book. Scientology came up at the panel discussion, but not much time was given to it.
Should Scientology Entities Be Recognized As Exempt Organizations?
Scott Pilutik Thinks I Am Wrong
The long struggle between Scientology and the IRS was put to rest with a 1993 secret agreement, that was later leaked. The IRS refused to confirm the leaked document, but there is little doubt about its authenticity. I thought the agreement was pretty benign, but Scott Pilutik thinks I got it wrong. I find it ironic that the agreement is similar in length to the Treaty of Westphalia.
IRS Scientology “Thirty Years War” – Village Voice Legal Expert Argues “Treaty” Is Unconstitutional
Bane Of The Basketball Ministers And Kent Hovind’s Worst Nightmare Puts In His Oar
To me, the most puzzling and disturbing aspect of the IRS Scientology fight was the deductibility of “auditing”. Here IRS veteran Robert Baty takes that issue on.
IRS Veteran Weighs In On Deduction For Scientology Auditing In Secret 1993 Agreement
A Knife To A Gun Fight
I may have become a broken record in restating my argument that the IRS is the wrong organization to take on Scientology.
That’s How They Got Al Capone But Scientology Maybe Not
I followed up on this thought in 2015 when John Oliver was going after televangelists.
Sending IRS Against Phony Churches Is Bringing A Knife To A Gun Fight
Independent Scientology
One of the problems anyone other than the IRS has in taking on Scientology’s exempt status is the legal concept of standing. One of the things that makes Scientology look less like a religion is its use of intellectual property law to prevent anyone not approved by the institution from competing with it. Imagine if Catholics could sue Lutherans and Episcopalians because Catholics have the trademark on Communion. We could refight the original Thirty Years War (Don’t know if we would need some people being thrown out a window to make it official) in court. Here Scott Pilutik speculates that Independent Scientologists might have standing to challenge Scientology’s sweet IRS deal.
Some Organizations Do Get Turned Down
This one is about what was apparently a Scientology critic getting turnd down for exempt status.
Did Scientology Critic Get Turned Down By IRS For Church Status?
The Moral Of The Story
My difference with those who want the IRS to go after Scientology has nothing to do with a disagreement about Scientology. I am agnostic on that. It is about what the proper function of the IRS is. I think it is there to enforce a complicated tax law, that currently contemplated so called reforms will make more complicated and collect trillions of dollars. ]People who want it to incidentally regulate the charitable sector are being silly. It is terrible at it as the recently concluded Tea Party scandal indicates.
Don’t Use 501(c) Status As A Hallmark Of Credibility
Other Developments
From 2012 on Scientology cases continued to be cited in tax litigation – over seventy cases, which given that I have a tax bill to worry about I am not going to try to run down. Most of the current coverage is repetitive. Tony Ortega has – If Trump is serious, he has a clear path to go at Scientology – through his Treasury Secretary.
Prior to this latest, I note that a change.org petition calling for an investigation was put up by Jeffrey Augustine earlier this year. Looking at SSRN, the only scholarly article I found that might be tangentially relevant – Is Scientology a Religion? Religious Marriage and the UK Supreme Court’s Landmark Decision Hodkin v Regsitar by Lorenzo Zucca. The article discusses the difficulty of determining whether something is a religion or not.
Britain lives in the age of equal marriage: most forms of discrimination have been removed and the state recognizes the union between two persons rather than that between a man and a woman. It is therefore not surprising that religious marriage is finally recognized to be pluralist: the church of scientology, for example, has just been allowed to celebrate valid religious marriages on its premises by the UK Supreme Court in a landmark case of Hodkin v Registrar.
There was also a round of commentary about the exempt status when Going Clear was released in 2015.