Scientology and Tax Exemptions

Update (6/1/15): an earlier version of this article misattributed testimonies about Church of Scientology practices to the film Going Clear. These errors have been either removed or corrected.
Academy Award-winning documentary filmmaker Alex Gibney’s latest picture Going Clear: Scientology and the Prison of Belief has stirred controversy within the Scientologist community and beyond. The film documents the experiences of ex-practitioners and alleged abuse within the Church of Scientology, prompting some observers to call for the IRS to revoke the institution’s tax-exempt status. It has also prompted a vigorous backlash from the Church and alleged physical threats against those who critique the Church’s practices in the film.
Gibney advances a very different position from the typical argument that Scientology’s tax-exempt status should be revoked on the grounds that it is not a real religion. In a recent op-ed, Gibney argues that even if the Church is a religion, it is using its status to hide behind the First Amendment while committing human rights abuses and possibly criminal activity. As Gibney writes, even recognized religions “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.’”
Gibney and others have noted that the leader of the Church of Scientology, David Miscavige, and other notable celebrity members have allegedly used Church assets for personal gain and exploited low-wage labor. The use of Church assets for private gain is strictly prohibited by the IRS for tax-exempt status, and these accusations alone merit another look and IRS investigation in light of the growing number of complaints by ex-members that Gibney interviewed.
Even if the Church manages to assure the IRS that it does not exploit members to benefit higher-level officials, the list of alleged violations of public policy and laws is much longer. According to one report, the Church of Scientology has paid private investigators to spy on Church critics, stalked and harassed former members, paid social media experts to create hate websites to attack journalists, spent millions to defend leader David Miscavige from legal suits using Church funds, and tricked individuals into donating funds to “defend the Scientology religion”, which were actually used for illegal spying on journalists, critics, and ex-members.
In defense of the Church, Monique E. Yingling, a lawyer who says she was intimately involved with the Church’s 1993 application for tax-exempt status, argues that Gibney mischaracterizes the Church and its activities. She argues that the Church released all of its financial documents to the IRS then, and that Gibney’s accusations are “plain false.” Further, Yingling says, “Church funds are dedicated to promulgation of the faith and supporting global humanitarian initiatives for the benefit of people of all faiths. Not one iota of the church’s actual activities is reflected in Gibney’s … piece.”
The problem with Yingling’s take is that she assumes, without justification, that the Church’s finances and activities today are exactly the same as they were in 1993. For one, Yingling ignores new evidence of illicit activities, like instances of spying reported in both a 2012 confession of a former member of the Church and a 2013 police report. There was no substantial evidence of such unlawful acts in the 1993 application for tax-exempt status.
Yingling’s claims, while not entirely substantiated, do merit thoughtful consideration. Still, there is enough evidence for critics like Gibney to reasonably call for an IRS investigation into the Church’s finances. Their allegations, if true, are serious enough to warrant investigation and prosecution of Church practices in order to sort out the claims made by Gibney and the former Church-goers in his film from those made by Yingling. With the fresh accusations against the Church of Scientology in Gibney’s film, it is hard to ignore the issues that have plagued the Church for years and do nothing. If the Church deserves its tax-exempt status it should be able to prove it by releasing documents and information to the public. If not, then an IRS investigation can separate the facts from fiction.
Image source: Wikimedia Commons / Matthew Field