Church of Scientology & Tax Exempt Status

[WednesdayAddams]

One of the frequent posters to my blog sent me a link this morning. As you likely all know President Obama has invited ideas and suggestions for helping the nation on his website change.gov (it was originally change.org). On January 14th of this year someone suggested revocation of the tax exempt status of the church of Scientology based on the fact that it is a for-profit organization.

My own opinion is that the CoS is a dangerous cult whose higher echelon members should be prosecuted for perpetration of fraud but that's just my opinion. Would revoking CoS' status as a tax exempt church open the door to taxation of all religions as was ruled by the court? Should CoS retain its tax exempt status?

[Fenris]

Sadly, won't happen although I'd love it to happen (mostly).

My concern would be just what you stated though. Unless you had an ironclad case against CoS as being a for-profit*, it strikes me as potentially malicious prosecution. Get 'em for fraud, for conspiracy, for negligent homicide, for practicing medicine without a license, for impersonating doctors, and hell, for blackmail, if you can get a case for it.

But unless they really are for-profit, I'd leave that particular door unopened.

*Are you sure? I really thought they were a non-profit.

[WednesdayAddams]

Per Wiki, the church did lose its exemption in 1967 and sued repeatedly til they eventually paid $12.5M in 1993 and got their tax exempt status back in addition to dropping numerous lawsuits against the IRS.

Scientology is a registered trademark which implies that it is a commercial venture. The way they game the legal system is more than a little frightening.

[Fenris]

But isn't "tax exempt" and "for/non profit" two different things? Related, but different?

[wring]

I think many people have an erroneous idea of what 'non profit' means. I run a non profit, and: legally sell items connected with our mission, the payments go to further our agency mission. We have contracts that are mostly "cost" (ie what we get reimbursed for what we spend but not for what we don't) and again, all activities further agency mission. Another contracts we've had, we negotiated an amount for the service, if it cost us less than that, we were allowed to keep the difference (kinda like you hire a painter to paint your house for 3 grand, and you don't expect a refund if he's able to do it for 2 grand his costs).

So, from what little I know about the CoS, pretty much all the stuff that folks point at as being 'profits' wouldn't necessarily effect their non profit status.

Fenris - as for that - We have documents from the feds asserting our non profit status as a 501c3 Corp. We have a document from the state asserting our status as "tax exempt" (meaning we don't pay sales taxes or property taxes). I believe they are two different things.

[WednesdayAddams]

Indeed. My understanding is that the question lies in whether the CoS can be defined as a church instead of a commercial enterprise. The fact that it is not recognized in other countries as a church and only as a commercial venture would seem to lend credence to the assertion that they are a business.

[Jaade]

Originally Posted by MarissaW

Indeed. My understanding is that the question lies in whether the CoS can be defined as a church instead of a commercial enterprise. The fact that it is not recognized in other countries as a church and only as a commercial venture would seem to lend credence to the assertion that they are a business.

People like Tom Cruise and John Travolta are reportedly giving this "church" hundreds of thousands, if not millions of dollars, right? As a "non-profit" and tax-exempt "church", aren't they expected to be able to show how they are putting that money to use? I cannot really claim a wealth of knowledge in this area, but it seems to me that would be a requirement. Where do they claim it is going?

[wring]

Originally Posted by Jaade

People like Tom Cruise and John Travolta are reportedly giving this "church" hundreds of thousands, if not millions of dollars, right? As a "non-profit" and tax-exempt "church", aren't they expected to be able to show how they are putting that money to use? I cannot really claim a wealth of knowledge in this area, but it seems to me that would be a requirement. Where do they claim it is going?

Actually the way I understand it, no, not necessarily. They would be allowed to bank it, invest it with an aim towards long range planning types of things like buying property, expansion etc.

[WednesdayAddams]

Originally Posted by Jaade

People like Tom Cruise and John Travolta are reportedly giving this "church" hundreds of thousands, if not millions of dollars, right? As a "non-profit" and tax-exempt "church", aren't they expected to be able to show how they are putting that money to use? I cannot really claim a wealth of knowledge in this area, but it seems to me that would be a requirement. Where do they claim it is going?

I honestly have no idea. I was hoping to garner more information by starting the thread. All I know about the CoS is that they have unsavory business practices and outright own the town of Clearwater, Florida. I spent some time on the website Operation Clambake but not nearly enough to unwind all the twisty legalities behind their "church" and how they still manage to claim the exemption.

Originally Posted by Illuminati Primus

I agree that the CSI (the actual acronym for the Church of Scientology International) is a disgusting organisation built on greed that is also quite happy to harass people as well as use the law to bully others, but I don't see why it should be singled out any more than, say, the Catholic church when it comes to tax exempt status. Either religion deserves a tax break or it doesn't, don't base this decision on whether you like the religion.

Here are my issues with that.

1. We have it from the Church's founder that it's a spurious religion he invented specifically for the purpose of making money. Yes I am an atheist and it is my consideration that they are all made up to one extent or another but IIRC all those other religions were not set up to perpetrate fraud.

2. If we allow religious organizations and churches to pay taxes does that not give them the opening to claim a say in government?

3. Does the CoS actually have any ongoing charitable concerns that derive funds other than those required by their members?

[Fenris]

Originally Posted by MarissaW

1. We have it from the Church's founder that it's a spurious religion he invented specifically for the purpose of making money. Yes I am an atheist and it is my consideration that they are all made up to one extent or another but IIRC all those other religions were not set up to perpetrate fraud.

I don't think we do have it from the Church's founder, unfortunately.

I'm a big science fiction fan and even like some of Hubbard's shorter fiction, and the "What's the quickest way to become rich? Start a new religion!" bit has never been documented. You can't even get a consensus on when he said it and/or to who.

(Plus, Scientology started as Dianetics--which was a sort of watered-down psychotherapy (Freudian style) with truth-detectors and some past-life stuff thrown in. It didn't begin as a religion. It only became a religion after the psychology folks started saying "Um....if its a therapeutic technique, let's test it.")

3. Does the CoS actually have any ongoing charitable concerns that derive funds other than those required by their members?

This is a great point.

[Illuminati Primus]

In my view if you're going to pick on one religion, you might as well pick on all of them. Religions having tax exempt status has no place in the 21st century, given how many of them are run as businesses (and yes, I get the distinction between not for profit whilst having income streams).

The Church of Satan has as part of its mission the goal of having tax exemption revoked for all religions (including theirs) to stop people being able to make money from belief without contributing meaningfully to society through taxation - giving monetarily as well as taking. The Church of Satan also contends that the revokation of tax exempt status would bankrupt a lot of churches, does anyone know if that's the case? (personally I think that's a bit hyperbolic as losing 20%-odd of your income surely couldn't bankrupt you?)

I agree that the CSI (the actual acronym for the Church of Scientology International) is a disgusting organisation built on greed that is also quite happy to harass people as well as use the law to bully others, but I don't see why it should be singled out any more than, say, the Catholic church when it comes to tax exempt status. Either religion deserves a tax break or it doesn't, don't base this decision on whether you like the religion.

[Tannim]

Originally Posted by Illuminati Primus

The Church of Satan also contends that the revokation of tax exempt status would bankrupt a lot of churches, does anyone know if that's the case? (personally I think that's a bit hyperbolic as losing 20%-odd of your income surely couldn't bankrupt you?)

I do think that revoking tax exempt status would bankrupt many churches. Not by having to pay income taxes but the property taxes on the land and buildings that they own would put them into bankrupcy.

[Illuminati Primus]

Originally Posted by Tannim

I do think that revoking tax exempt status would bankrupt many churches. Not by having to pay income taxes but the property taxes on the land and buildings that they own would put them into bankrupcy.

I see - well, this doesn't actually make less of a case for removing tax exempt status to me, they could always sell some of their property so that the taxes matches their income.

[mozg]

Originally Posted by Tannim

I do think that revoking tax exempt status would bankrupt many churches. Not by having to pay income taxes but the property taxes on the land and buildings that they own would put them into bankrupcy.

I don't have a problem with that.

Why shouldn't churches pay taxes? Why would it be such a tragedy if they had to sell some of their property, reducing the wealth that they have locked up in real estate?

[Illuminati Primus]

Originally Posted by mozg

I don't have a problem with that.

Why shouldn't churches pay taxes? Why would it be such a tragedy if they had to sell some of their property, reducing the wealth that they have locked up in real estate?

I guess the counter argument is that they'd be forced to sell all those soup kitchens, orphanages and schools that they run, but then they also have a lot of land that is residential property (in the form of priest/bishop mansions, in the UK at least).

[mozg]

Originally Posted by Illuminati Primus

I guess the counter argument is that they'd be forced to sell all those soup kitchens, orphanages and schools that they run, but then they also have a lot of land that is residential property (in the form of priest/bishop mansions, in the UK at least).

They could always spin the soup kitchen, orphanage, or school off as a separate organization that doesn't have a religious bent and still does the same thing.

Although they won't do that, particularly not with the schools, because then they wouldn't be able to make religion part of the deal.

[Lanzy]

I would be in favor of revoking all tax exempt status of all churches. I don't really see enough of a difference in any of them to single one out.