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By Andrew Milne
n keeping with what experts had been saying for a long time, in October 1993, the Church of Scientology International (CSI), the Mother Church of the Scientology religion, and more than 150 affiliated churches, missions and social reform organizations in the United States were recognized as fully tax-exempt religious organizations by the Internal Revenue Service, America’s federal tax agency.
That bald statement does not begin to describe the drama behind the Church’s 40-year battle to win recognition from the U.S. government as a religious and charitable organization.
How little the magnitude and import of what has been recognized is grasped by the German government is illustrated by the reaction of its Embassy in Washington, D.C. Shortly more than three weeks after the IRS issued its ruling, an Embassy official named Reimann sent a “briefing” on the IRS decision to his Foreign Affairs Office in Germany.
Although Reimann pretended to present a factual analysis and summary of the tax-exempt ruling, all he really did was summarize misrepresentations and falsehoods that had appeared in two or three American newspapers. From those he extracted the passages which were clearly negative. He conveniently overlooked the many more articles that appeared in the most prestigious newspapers around the world and failed to inspect original information at its source.
More importantly, he also ignored completely an official briefing on the ruling that had been sent to his Embassy by the IRS itself.
Had Reimann really done a professional job and included the information sent to him by the IRS, as he would have done had he been carrying out his duties responsibly, he would have come up with a different, correct result.
Reimann’s letter illustrated the bigotry demonstrated towards Scientology by German government officials, and showed that he didn’t want to be any more informed about the rigorous exemption process that the Church had undergone than a newspaper reporter scanning the wire services for a story. Moreover, it proved that even when presented with overwhelming evidence of the Church’s bona fides, the German government improperly continued to apply a different standard to the Church of Scientology than to the established religions.
The IRS examination of the Church involved a most stringent, comprehensive, detailed and exacting scrutiny of every aspect of the Church’s policies and practices for all major Church organizations at the most senior levels of Church management.
The IRS applied a “fourteen-factor” test in determining whether the Church of Scientology met the criteria required for exemption. Questions the IRS asked as part of its probe included:
Does the Church have its own religious creed and form of worship?
Does it have its own definite and distinct ecclesiastical government?
Is there a formal code of doctrine and discipline?
Does Scientology have a distinct religious history?
Are there ordained ministers?
Does it have a literature of its own?
Are there established places of worship and a regular congregation?
Are there regular religious services?
Is there religious instruction of the young?
The IRS also sought to establish that the Church “serve[s] an associational role in accomplishing its religious purpose in order to qualify as a Church.”
The record provided to the IRS by the Church not only fully satisfied the tax agency on every one of its “fourteen factors,” but also demonstrated that through Scientology religious counseling and training, celebration of religious holidays, weekly religious services and mutual practice of Scientology beliefs, associative activity directed towards accomplishing a religious purpose is a primary characteristic and principal activity of the Church of Scientology.
The IRS’ decision to grant the Church exemption was not issued in a vacuum. It represented the culmination of the most extensive fact-gathering process imaginable. This process encompassed every means within the IRS’ power to develop information, from litigation to exemption application proceedings to actual tax audits and on-site inspections.
Although some individual Churches of Scientology had received their exemption prior to 1993, false information about Scientology in IRS files, including from German government sources, had prompted the Service to challenge the Church’s exempt status many times in its history. As a result, Churches of Scientology have been examined, audited and scrutinized by the IRS more thoroughly than any other exempt organization in IRS history.
The IRS asked hundreds of specific questions for detailed factual information with respect to the areas of its concerns. The Church provided complete responses to every question asked. These responses amounted to more than 11,000 pages of information constituting 12 linear feet of stacked paper. They included balance sheets for all of the major organizations in the Church in the United States, all expenditures from Church reserves for a three-year period, all planned expenditures from Church reserves for the next five years and a report on the expenditures for the five previous years.
The IRS also had to be satisfied that the Church’s funds were not benefiting private individuals. To accomplish this, compensation information for Church executives and the highest paid individuals in the Church was provided as well as financial information concerning the highest paid vendors that the Church dealt with, answers to many other specific financial questions and extensive information concerning the Church’s structure and organizations and the integrity of its financial records.
The magnitude of the IRS’ inquiry into the Scientology religion is without parallel in the history of United States Internal Revenue law. At no time during this extensive examination did the IRS find a single instance of inurement or reason to criticize the integrity of the Church’s books or financial records. Indeed, this governmental investigation of awesome proportions ended with but one unassailable conclusion: that the Church of Scientology operates exclusively for tax-exempt religious purposes and that Scientology, as a bona fide religion, is beneficial to society as a whole.
The IRS recognition conclusively showed that government officials such as Ursula Caberta and Federal Minister of Labor Norbert Bluem (see “Exposing Hatemongers at Work”) are completely wrong about Scientology and that their allegations against the religion are based not on fact, but on prejudice or political showmanship.
Churches of Scientology in Germany operate according to the same policies and pursue the same beliefs and practices as those in the United States. Thus, for years, the government had claimed that because the IRS had refused to recognize the tax exemption of the Mother Church, Scientology was not entitled to recognition in Germany.
After exemption was granted, however, instead of acknowledging that the Church had proven its right to be considered exempt, the German government not only refused to acknowledge the Church’s bona fides, but embarked on a full-scale propaganda campaign designed to deceive the German public and judiciary into believing that the Church has commercial aims.
The government’s attitude towards the U.S. government’s formal recognition of Scientology contrasts markedly with that of its counterparts in Canada, where the governments of all provinces (states) have recognized Scientology as a religion and the remaining two provinces (Ontario and Quebec), following the IRS recognition, granted the Scientology ministers the official right to perform marriages.
It also contrasts with Interpol, which, like the IRS, agreed to end its long-standing conflict with the Church and now fully acknowledges the religious bona fides of Scientology.
The truth is, as Scientology proceeds into its fifth decade, the religious nature of the Church is broadly recognized by scholars, courts and agencies all over the world, including France, Belgium, the Netherlands, Portugal, Italy, Russia, Hungary, Albania, Costa Rica, the United States, Canada, Australia, New Zealand and even by courts in Germany.
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