Since some of the materials which describe the $cientology cult could be
considered to be copywritten materials, I have censored myself and The
Skeptic Tank by deleting any and all possible text files which describes
the cult's hidden mythologies. I have elected to quote just a bit of the
questionable text according to the "Fair Use" legal findings afforded to
those who report. - Fredric L. Rice, The Skeptic Tank, 09/Sep/95
From news.interserv.net!news.sprintlink.net!gatech!usenet.eel.ufl.edu!news.cybercom.net!dial1-18.cybercom.net!user Mon Jul 10 17:02:47 1995
From: email@example.com (Ron Newman)
Subject: Scientology and the IRS
Date: Sat, 08 Jul 1995 10:09:07 -0500
Organization: Cyber Access Internet Communications, Inc.
Here is a very short and incomplete history of Scientology vs. the
Internal Revenue Service:
In 1978, the IRS issued Revenue Ruling 78-189. This ruling explicitly stated
that "A `fixed donation' paid to the Church of Scientology for general education
courses, religious education courses, and `auditing' and processing courses that
does not exceed the fair market value of these courses is not a charitable
contribution within the meaning of section 170 of the code."
The IRS ruled that such contributions are comparable to tuition payments made to
a private or parochial school. "Such amounts are not gifts to the school, but
are consideration between the parties." To deduct such payments, the taxpayer
would have to establish that the "fixed donations" exceed the fair market value
of the benefits and privileges received (and then could deduct only that
In 1989, the U.S. Supreme Court upheld this IRS ruling, in the
case of _Hernandez v. Commissioner_, by a vote of 5-2.
On October 1, 1993, the IRS ruled at least 25 Scientology-related
organizations to be tax-exempt under section 501(c)(3) of the
Internal Revenue Code.
On November 1, 1993, the IRS released Revenue Ruling 93-73, which
states, in full, "Revenue Ruling 78-189, 1978-1 C.B. 68, is obsoleted."
No further explanation accompanied this ruling.
These 1993 events produced a flurry of articles and letters
in a weekly journal called _Tax Notes_, published by the organization
"Tax Analysts" in northern Virginia, near Washington D.C. All of
these were written by Paul Streckfus, unless otherwise noted:
Church of Scientology Recognized as Tax-Exempt, 10/18/93 pp 279-281
Surrender to Scientologists Raises More Questions about
IRS's Administration of Exempt Orgs, 10/25/93, p 500
Church of Scientology Update, 11/1/93, pp 525-6
Letter from Church attorney Thomas Spring, 11/1/93, pp 625-6
Latest IRS Ruling Provides More Good News for the Scientologists,
11/8/93 pp 643-4
Internal Revenue Bulletin listings, 11/8/93, p 669
Letter from Church attorney Monique Yingling, 11/8/93, pp 747-8
Letter from Marty Rathbun of Religious Technology Center, 11/15/93, p 871
Were Partial Deductions for Past Payments Part of Scientology Deal?
12/6/93 pp 1144-45
Recap -- What We Know About the Scientology Closing Agreement,
1/10/94, pp 131-2
IRS Should Fully Explain Its Settlement With Church of Scientology,
by Jerome Kurtz, chair of the Committee on Taxation of the
New York City Bar Association (this is a copy of a letter that
Kurtz sent to the IRS Commissioner), 6/27/94 pp 1783-4
Do Scientologists get a break not extended to other churches?
by Fred Stokeld, 4/17/95 pp 324-325
"Tax Analysts" filed an FOIA request on November 10, 1993, whic they published
in another of their journals, _The Exempt Organization Tax Review_ of December
1993, page 1016. I do not know the current status of this FOIA filing.
Tax Analysts Files FOIA Request for Scientology Closing Agreement
November 10, 1993
Mr. Randy Hartman
Chief, FOIA/PA Section
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, DC 20224
Dear Mr. Hartman:
This is a request for Internal Revenue Service (IRS) records under
the federal Freedom of Information Act (FOIA), 5 U.S.C. Section 552.
On behalf of my client, Tax Analysts, publisher of _Tax Notes_, I request
copies of the following records:
1. The Closing Agreement or Agreements between the IRS and one or
more Church of Scientology organizations, which preceded IRS's issuance
of exemption ruling letters to at least 25 such organizations
on October 1, 1993.
The requested Closing Agreement or Agreements were executed by IRS
and the organizations, who were represented by Monique E. Yingling, Esq.
of Zuckert, Scoutt & Rasenberger, and Thomas C. Spring, Esq. They also
preceded Rev. Rul. 93-73 (November 1, 1993), which "obsoleted" Rev. Rul.
78-189, a revenue ruling that the United States Supreme Court had
upheld in _Hernandez vs. Commissioner_, 490 U.S. 680 (1989).
Disclosure of the requested records is required on several grounds:
(a) Closing Agreements include reasoning and explanation of the IRS's
interpretation of applicable provisions of law. In this case they doubtless
contain an explanation of the IRS's reasoning behind its change in position from
that in Rev. Rul. 78-189, and how that change might square with the decision in
_Hernandez_. It therefore is the same kind of IRS "secret law" that the courts
held disclosable in such cases as _Taxation With Represntation Fund v. IRS_, 646
F.2d 666 (D.C. Cir. 1981), and _Tax Analysts & Advocates v. IRS_, 505 F.2d 350
(D.C. Cir. 1974), on remand, 405 F. Supp. 1065 (D.D.C. 1975).
(b) The Closing Agreement, although it is in the nature of settlement of a
controversy, loses any claim for exemption because by necessity it was shared
with the opposing party. See _County of Madison v. U.S. Dept. of Justice_, 641
F.2d 1036 (1st Cir. 1981).
(c) No claim of exemption lies under section 6013 of the Code. Information
relating to exempt organizatoins is divested of confidentiality. The rulings
published on October 1, 1993, establish the nonconfidential exempt organization
character of materials relating to Churches of Scientology.
2. All other Closing Agreements relating to exempt organizations
executed on or after December 31, 1992.
These Agreements are disclosable for all three reasons stated in
part 1 above.
3. All Closing Agreements relating to taxpayers that are not
exempt organizations, executed on or after December 31, 1992, but with
the taxpayer names and other taxpayer identifying information deleted.
These Closing Agreements with taxpayer identifying information deleted
are disclosable for the reasons stated in 1(a) and (b), and under
the principle applied in _U.S. Dept. of the Air Force v. Rose_,
425 U.S. 352 (1976), and codified in section 6110.
4. Tax Analysts will pay the reasonable charges for duplication
of the records. Tax Analysts is a media requester as defined in
26 C.F.R. Section 601.702(f)(3)(i)(B); see _Tax Analysts v. U.S. Dept.
of Justice_, 965 F.2d 1092, 1095-96 (D.C. Cir. 1992), and therefore
may only be charged costs of duplication, _id._ (ii) (B).
I look forward to your response within 10 working days.
William A. Dobrovir, Esq.
Ron Newman firstname.lastname@example.org