This question has persisted without agreement within Scientology criticdom for years, largely because it’s impossible to answer without defining religion either so amorphously as to strip the word of all meaning, or so exclusively as to omit many widely recognized religions. Still, the question matters if for no other reason than the fact that it keeps getting asked, usually in the context of the more interesting question about why Scientology is considered a tax exempt entity.

Briefly to that end, it’s important to realize that the two entities with seemingly the most interest in determining whether Scientology is a religion–the US courts and the IRS–are constrained by the establishment clause to define religion so expansively as to avoid implicitly endorsing religion X over religion Y.

In a country as religiously pluralistic as the US, the courts must hew to a broad and inclusive definition of religion.

Early court decisions attempting to define religion predictably chose monotheistic terms–”The term ‘religion’ has reference to one’s views of his relations to his Creator[.]” Davis v. Beason, 133 U.S. 333 (1890). “[T]he essence of religion is belief in a relation to God involving duties superior to those arising from any human relation.” US v. MacIntosh, 283 U.S. 605, 633-34 (1931) (Hughes, C.J., dissenting).

Soon after, in 1944, God disappears from the definition:  “[F]reedom of religious belief … embraces the right to maintain theories of life and of death and of the hereafter which are rank heresy to followers of the orthodox faiths.”  Ballard v. US, 322 U.S. 78 (1944).

In US v. Seeger, 380 U.S. 163 (1965), the Supreme Court interpreted legislation exempting conscientious objectors from war (here, the Vietnam War) as including beliefs which even the plaintiff had not initially described as religious. The statute defined religion as “an individual’s belief in a relation to a Supreme Being involving duties superior to those arising from any human relation, but does not include essentially political, sociological or philosophical views or a merely personal moral code.” The court read this to include “all sincere religious beliefs which are based upon a power or being, or upon a faith, to which all else is subordinate or upon which all else is ultimately dependent.”

The Supreme Court has thus kept pace with modern theological trends by stretching the definition of religion to essentially mean any structured belief system which sincerely based on “ultimate concerns.” US v. Seeger, referencing progressive theologian Paul Tillich, Dynamics of Faith (1957) (defining faith as “the state of being ultimately concerned”). See also Welsh v. U.S., 398 U.S. 333 (1970).

Which brings us to Scientology, which is also unconcerned with any Supreme Being but instead, similar to inward-looking Eastern religions, views the soul, or what Scientology founder L Ron Hubbard called the “thetan,” as an immortal being. Per Hubbard, an adherent’s spiritual growth is wholly tied to gaining an increased understanding of one’s thetan, which is accomplished through a series of exercises and courses, often in tandem with another Scientologist called an “auditor” and often with the aid of an electropsychometer (“e-meter”), a sort of lie detector employed by the auditor in these courses.

By the Supreme Court’s increasingly generous definition of religion, broadened to keep pace with a growing pluralistic populace and to comport with the first amendment, it’s difficult to argue that Scientology, as I describe it above, is not a religion.

That said, the relevant question the IRS asks in determining an entity’s tax exempt status isn’t whether the entity is a “religion” but rather whether it’s organized and operated for a “religious purpose.” This distinction is not merely semantic. Though it rarely happens, the IRS can both recognize an entity as a religion and yet still deny it tax exempt status. See Bob Jones University v. US, 416 U.S. 725 (1974) (Court revoked exempt status of religious university which denied admission to applicants engaged in an interracial marriage or dating).

Despite that its tenets easily qualify as “religious” per the US constitution, there are nevertheless countless arguments why Scientology and its myriad corporate fronts should be denied tax exempt status because it is not organized and maintained for a “religious purpose.” 26 U.S.C. § 501(c)(3).

Religious groups risk losing their tax exempt status in a number of ways, such as if its net earnings inure to an individual; if it provides a substantial benefit to a private interest; if it devotes a substantial part of its activities attempting to influence legislation; if it participates or intervenes in any political campaign on behalf or in opposition to a candidate for public office; or if its purposes and activities are illegal or “violate fundamental public policy.” IRS Guidelines, Activities that are Illegal or Contrary to Public Policy.

An easier way to understand this is that the government cannot regulate belief, which is why it must define religion so broadly, but it can regulate activity, i.e., determine the existence of a “religious purpose.”

The most common reason a religion is denied or loses its tax exempt status is where its funding inures to an individual or individuals as opposed to the organization. LAW. This was the basis, in fact, upon which Scientology was first denied exempt status, when it emerged in the course of a trial that L Ron Hubbard was personally enriched by the organization. Founding Church of Scientology v. US, 188 Ct. Cl. 490 (Ct. Cl. 1969) (Court found impermissible a personal compensation scheme whereby the Church of Scientology had personally compensated L Ron Hubbard and his family at least 10% of its gross income).

By 1986, when L Ron Hubbard died, his religion was still not recognized by the IRS as exempt. Seven years later (1993) Hubbard’s successor, David Miscavige, negotiated a deal with the IRS granting it exempt status in exchange for Scientology dropping hundreds of lawsuits it had filed against the organization. Its terms remain officially secret to this day (the most recent unsuccessful attempt to crack it came in Sklars ) but were nevertheless leaked to the Wall Street Journal in 1997.

The IRS originally held the view that Scientology was not organized for a “religious purpose” but then reversed itself without explanation. What changed? By most accounts, the organization has only gotten more sinister under Miscavige, who is widely reported to violently beat subordinates, and live in unmatched luxury while staff members can make as little as $50/week.

But let’s break down why Scientology in its present incarnation isn’t “organized for a religious purpose,” and why, accordingly, it should have it exempt status rescinded: (1) Scientology has an explicitly commercial, non-charitable nature; (2) its revenues inure to a single individual; (3) it forces many of its members to disconnect from their families; (4) it grossly mistreats many of its members; and (5) it harasses and attacks ex-members and critics.

Taking these in turn then…

(1)

Regardless of Scientology’s thetan-concerned religious content, it seems significant that Scientology charges exorbitant amounts to become progressively enlightened. The functional practice more closely resembles psychotherapy, where one pays as one goes, than the community-oriented tithing and donation structure found with most other religions. Scientology attempts to dance around this by labeling all quid pro quo course payments as “donations.” From a business perspective, Scientology is profoundly profitable–staff members are paid a fraction of the federal minimum wage, while parishioners pay hundreds of thousands of dollars for the privilege of being audited.
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Scientology routinely resorts to high-pressure sales tactics to sell courses and solicit donations to various projects, often resulting in the financial ruin of its members. It even exhorts its members to pressure other members if they’re deemed to not be going “up the bridge” quickly enough. Though many religious groups can be financially demanding of their parishioners, among tax exempt religions I have yet to see any group comparable to Scientology. It routinely bankrupts members and declares them suppressive (excommunicates them) if and when they protest.

One high-ranking ex-Scientology official, Debbie Cook, recently estimated that Scientology has $1 billion dollars in reserve. Of that, virtually none goes to any form of social betterment or benefits local communities in any way. Scientology maintains a handful of social betterment groups (Narconon, Criminon, Applied Scholastics, and The Way to Happiness), each which are either run for-profit ventures or exist solely to “safepoint” (create generally good public relations) for L Ron Hubbard and/or Scientology. Narconon (a drug rehabilitation organization utilizing L Ron Hubbard’s scientifically disproven theories regarding toxins) is not only expensive, but is implicated in a trail of ‘patient’ deaths. Narconon Georgia is under state investigation for a massive insurance fraud scheme.

In short, parishioners pay hundreds of thousands of dollars to become Scientologists, money which benefits those parishioners directly; Scientology benefits by not having to pay taxes on those profits; and the general community benefits in no way whatsoever.

(2)

In Foundation Church, supra, the court found that Scientology revenues directly benefited L Ron Hubbard and that the IRS was therefore justified in denying Scientology tax exempt status for failing to organize and maintain a religious purpose. Hubbard’s successor, David Miscavige, has been, if anything, worse in this regard, his personal possessions are a laundry list of obscene wealth: $5,000 tailored suits, $500 Egyptian cotton shirts, the finest Italian leather shoes, personal use of a private jet, a $50,000 Acura RL, a $25,000 Mazda Miata, an $80,000 Range Rover, an $150,000 bulletproof GMC Van, a $25,000 custom-made motorcycle, a $110,000 BMW M6, a $45,000 Acura to use then he’s in Clearwater, Florida, a personal chef, a personal stylist, and so on. Even on Miscavige’s self-granted six-figure salary, the aforementioned perks could not be accounted for without assuming that he’s personally benefiting from Scientology revenues.

The inurement question gets even more lurid when considering how Miscavige’s best friend, Tom Cruise, also has personally benefited from labor performed by Scientology staff members. For example, Cruise’s elaborate wedding to Nicole Kidman was staffed by Scientology members at no cost to Cruise. Miscavige’s wedding gift to the couple was to arrange for a team of twenty Sea Org disciples to dig, hoe, and plant wheat grass and wildflower seed near the Cruises’ bungalow (on Scientology grounds) after Miscavige had learned of the couple’s fantasy of running through a meadow of wildflowers together. Miscavige threw a birthday party for Cruise aboard its cruise ship The Freewinds, estimated to cost $300,000. And Miscavige bestowed countless gifts worth hundreds of thousands of dollars on Cruise, often necessitating cheap, uncompensated Sea Org/staff labor. Cruise, through his lawyers, has issued a blanket denial but such denials are outweighed by numerous corroborated accounts. See generally Andrew Morton, Tom Cruise: An Unauthorized Biography (St. Martin’s Press, 2008).

Inurement is probably the most common basis upon which religious entities lose their tax exempt status. If the IRS cared to look, they’d have little trouble spotting Miscavige and Cruise personally benefiting from Scientology revenues in ways which have no discernible religious connection whatsoever.

(3)

The term “cult,” like “religion,” is, on the one hand, a useful demarcation line for how most people approach the question of whether Scientology is a religion. Religions are good and cults are bad, but why that’s the case is a somewhat subjective matter, similar to how the question of what is and isn’t a religion is difficult because of how everyone perceives religion personally, first, rather than dryly and objectively. My religion is a religion because I’m “good” and cults are “bad,” semantically speaking.

Nevertheless, one commonality of cults and continued evidence of their malignancy is that they tend to break up families, which most agree is an effect detrimental to communities in general. Scientology has alternately denied and defended (and indeed even claimed it as a human right) its well-documented practice of “disconnection,” whereby a member is forced by the organization to disengage from all communication with anyone critical of Scientology (inevitably the most skeptical family member). Scientology even designates a term for these pests: Suppressive Persons (or “SPs”), and a member risks his/her own standing within Scientology if they are “PTS” (Potential Trouble Source) to an SP.

Family represents an important value in America, but so does the principle of autonomy, and there is friction between the two. There is no recognized legal right or obligation for of-age family members to communicate with each other. Nor do we want to set precedents whereby churches’ institutional and its individuals’ autonomy is threatened by government policies. Scientology would argue that to rescind its tax exempt status because its practices break up families would be to religious. There’s some merit to this argument. The more powerful counterargument is simply that taxpayers should not be forced to effectively subsidize the destruction of families.

(4) & (5)

Scientology routinely mistreats its members, and especially its staff members. Ex-Sea Org members have filed lawsuits for labor law violations, forced imprisonment, human trafficking, and forced abortions. These damning accounts are largely corroborated, yet Scientology manages to escape prosecution and liability because the ex-members in question were either deemed to have consented or were deemed “ministers” and thus fell under the “ministerial exception,” which allows religious groups to be exempt from ordinary labor laws. Even if we concede that Sea Org members, after expressing their informed consent, thus waiving most claims they might later bring, it remains true that minors cannot waive such rights. Yet Scientology continues to employ children as Sea Org members (L Ron Hubbard viewed, and thus Scientology views children as undeveloped adults) and continues to abuse them without repercussion.

Scientology also infamously mistreats ex-members who dare criticize it, a group that includes not only former Scientologists but journalists and non-ex-member critics. The Internet is replete with endless stories of Scientology’s aggressive handling of individuals it deems threats, so I won’t bother detailing them here. But to the extent Scientology’s harassment engine is kept afloat and churning by a boundless tax-exempt repository (specifically, the International Association of Scientologists, or “IAS”), yet another basis exists to rescind Scientology’s tax-exempt status for failing to maintain a religious purpose.

In sum, in the United States the question of Scientology’s religiosity is a useless academic exercise because the first amendment has constrained courts (and thus the IRS) to define religion so broadly inclusive as to be meaningless. By the broadest definition, Scientology’s core beliefs easily qualify as religious. However, by the IRS’s more stringent requirement that tax-exempt entities be organized and maintained for a  religious purpose, Scientology fails because its revenues inure to a single individual, leader David Miscavige, its operation is indistinguishable from a for-profit business enterprise, and its practices–disconnection, the abuse of of members, and the ruthless handling of critics–violate public policy.

At age 9, Laura began working for the Church of Scientology’s Sea Org in the most miserable conditions imaginable in a non-third world country. At age 16 she married a fellow Scientologist staff member and soon became pregnant. Scientology forced her to abort her child–Sea Org workers with children aren’t nearly as productive and, accordingly, having them is forbidden.

Laura endured many more years of abuse within the Sea Org, spending long stretches of time on the Rehabilitation Project Force (Scientology’s brand of prison camp). In 2004, at the age of 25, she had finally had enough. Knowing that the quickest way out was to be seen as visibly suicidal, which would cause Scientology to “offload her,” she ingested bleach in view of another Sea Org worker. Laura calculated correctly–her Sea Org days were immediately over (although she remained financially on the hook–Scientology charged her $120,000 for her “job training”–and she remained a Scientologist until 2008). Her husband remained–and remains–in the Sea Org. Before leaving Laura was required to sign numerous documents releasing Scientology from liability on any number of fronts.

Laura tells her story here in a St. Pete Times produced video which was part of its extensive 2009-2010 series on Scientology, The Truth Rundown.

Jonny Jacobson provides a more thorough summary on Laura’s backstory here.

As noted above, in 2009 Laura sued the Church of Scientology in California state court on a variety of bases. (Her second amended complaint can be read here.) Scientology removed the case to federal court and moved to dismiss, arguing that the claims were time-barred. The federal court–reasoning that Laura’s claims had accrued in 2004 and each had a statute of limitations of four years, meaning that Laura needed to file suit four years after leaving Scientology, i.e., by 2008. Laura’s attorneys argued that Scientology should be equitably estopped from asserting a statute of limitations defense where they had engaged in coercive and misleading tactics designed to prevent her from bringing a lawsuit.

The federal district court disagreed, reasoning that even if true, Laura was always aware of the underlying facts which formed the basis for the lawsuit. It remanded to the state court to address the non-federal claims, which, adopting the federal court’s logic, dismissed the remaining claims as time-barred but with leave to amend the complaint, which she did. The amended complaint didn’t change things for the state court, however, which again ruled that Laura’s claims were time barred, and dismissed the complaint, this time without leave to amend. Laura appealed, contending that upon leaving she had been threatened, intimidated, and lied to that documents she signed released Scientology from liability.

In its June 24, 2011 opinion, the California Court of Appeals (Second District) agreed with Laura, finding that she had…

adequately alleged that (1) she was unable to comprehend the wrongfulness of the defendants’ conduct for a period of time and that her causes of action did not accrue until she did so and (2) even after her delayed discovery of her causes of action, the defendants’ threats and intimidation caused her to delay filing her complaint.

Scientology had also argued that the federal court dismissal of her claims collaterally estopped (essentially, legally prevented due to a prior ruling) Laura from litigating those same issues, but the appeals court noted that the federal court’s dismissal came prior to Laura’s second amended complaint, which contained new allegations not precluded by the federal judgment.

The appeals court provides a thorough explanation of the legal principle (“equitable estoppel”) that permits Laura to bring otherwise time-barred claims, but the following definition is the most concise: “Where the delay in commencing action is induced by the conduct of the defendant it cannot be availed of by him as a defense.” In other words, if Scientology in any way caused Laura to delay filing her claims, they cannot assert a statute of limitations defense.

The appeals court then finds that Laura has more than adequately pled facts in her second amended complaint which, if true, prevent Scientology from asserting the statute of limitations as a defense. Those facts are as follows:

1. She was forced to work in harsh conditions and subjected to punishment;
2. At the time she terminated her employment and left the facility in 2004, she was required to sign documents purporting to exculpate defendants and requiring her to keep certain information confidential or suffer penalties and fines;
3. Defendants knew that those documents were contrary to law and unenforceable, and that defendants intended to intimidate her into believing that she had no legal rights against them;
4. She was told at that time that she owed defendants approximately $120,000 for her job training;
5. She remained a loyal Scientology follower until July 2008 and that, as a loyal follower, she was forbidden from reading or thinking anything negative about Scientology;
6. She was threatened with harassment and banishment from her family and friends who remained at the Scientology facilities if she were deemed an enemy of Scientology;
7. After leaving the facility, she made payments on her purported debt for some time because she believed that she was obligated to do so and she reasonably believed that she had no legal rights or claims against defendants because of their representations concerning the documents that she had signed; and
8. She first realized in July 2008 that she might have legal claims against defendants despite the documents she had previously signed, when she happened upon some information on the Internet and her family members then shared their concerns.

[The above is taken directly from the court of appeals decision but I took the liberty of reformatting it for readability purposes.]

It’s helpful to realize at this point that the court is assuming the above facts are true only for the purposes of affirmatively finding whether Laura has adequately pled a cause of action able to survive Scientology’s motion to dismiss. On remand, it will be the trial court’s task to discover “[w]hether plaintiff’s reliance on the alleged threats was reasonable” based on the evidence produced at trial. This effectively means that discovery may now commence in the Laura Decrescenzo v. Church of Scientology International, Inc., et al. lawsuit.

This leaves Scientology in something of a pickle. The last thing they want is a public inquiry into the horrific conditions endured by Sea Org members. As the above video bears out, Laura comes off as credible and highly sympathetic. A trial is incredibly risky. At the same time, settling carries its own risks. As nightmarish as Laura’s story is, it is sadly not uncommon, as anyone who has researched Scientology can and will tell you. To settle would be a tacit admission that Scientology’s standard practices–with nothing more–violate various torts, labor laws, and civil rights norms. It would also be a tacit admission that the form waivers and releases Scientology requires every member to sign are ultimately unenforceable.

So what will Scientology do? If history is a reliable guide, they’ll eagerly pursue Option C–that is, neither settling nor commencing discovery–for as long as they can. But I don’t want to think out loud on Scientology’s behalf with respect to their legal options so I’ll end this here.

[NOTE: the PDF provided by Rathbun, an image of the original spreadsheet, was difficult to read (and thus unsearchable) and so Anonymous members at WWP collaboratively transcribed the document first to a Google spreadsheet (here), which I then converted to an Excel spreadsheet (here). Finally, the most easily readable and accessible version is this html version. Also, many Scientology acronyms are sprinkled throughout, most of which can be found at the the Scientology Critical Information Directory’s Glossary]

The members on the list are mostly long-time “public” (not staff) Scientologists, and is probably about two years old. Some names appearing on the list have even left the CoS, such as Natalie Hagemo, who’s exit the list’s author unwittingly foretells with this comment:

Actually right now I do not use her on anything sensitive or seriously important because she has a PTS situation and just never seems to get to an org to get it handled.

On the comments section of Rathbun’s blog, Natalie acknowledges having left and offers further background on her situation.

But the list is far more fascinating and valuable than as a who’s who of OSA volunteers. The spreadsheet is filled out extensively and provides some insight into the Church of Scientology’s paranoid mind set. The list says more about its authors than those listed. For example, one column on the spreadsheet is labeled “Trusted,” which begs the question, Trusted in relation to what? Since everyone on the list is a member of Scientology, what further trust is required than those members having already paid the organization hundreds of thousands of dollars? Perhaps OSA engages in activities that if spoken openly of by the less-then-fully-trustworthy volunteer could endanger the Church? Quite likely, given OSA’s history.

Some entries suggest as much. For example, Sheldon Hogarth of the Los Gatos, CA Org:

Volunteers on MEST [ed: Matter, Energy, Space, & Time] projects such as fixing security cameras around the building. Volunteers on Org security during the day during Anon pickets. He takes photos of them and car plates. I trust him for this type of activity.

and about Bob Johnson of the Stevens Creek, CA Org:

I trust him but don’t know if I would expose him to invest items.

|Ed: invest = investigation] But another even more reasonable explanation exists. Because OSA volunteers are often called upon to interact with the general public (that is, protestors), it is important that they be so indoctrinated as to be immune to “entheta”–i.e., negative information about Scientology. Scientology members who succumb to entheta become ex-members of Scientology, and ex-members do not purchase expensive Scientology services. Remember, this list is largely comprised of OT (Operating Thetans)–people who have spent enormous amounts of money. Getting rubes into the tent is only half the game; keeping them there–especially the wealthiest rubes–is far more important. The entry for Lorin Burton of the Santa Barbara, CA Org, demonstrates what I’m talking about:

Anon pickets. As OTV used to buffer lower grade chart staff from making contact with SPs outside.

|Ed: Anon = the group known as Anonymous; SPs = suppressive persons] In other words, as an OTV, Lorin Burton is sufficiently indoctrinated to withstand the messages delivered by protestors. The flip side of this is Catherine Emrani, who may not be indoctrinated quite enough:

Has done wildcat PR/getting articles submitted without approval. Did invocation for the Glendale city council. But not an ordained minister. Went on Youtube. Got enturbulated. Demanded handling. Is OK in PT.

The term “enturbulate” is a Hubbard-invented word that means to agitate or disturb the sensibility of a Scientologist. Ms. Emrani apparently witnessed “entheta” on the Internet (take my word as a semi-frequent producer of it–it’s everywhere), became “enturbulated” and required Scientology “handling” to undo the damage. (And she undoubtedly paid for that handling.) Thus, the list author is relating that a Emrani is susceptible to entheta, which fact will affect what responsibilities are thrust upon her in the future. It is also telling that despite Emrani having furthered Scientology’s goals by submitting “articles” (most likely PR Newswire garbage), the list author remarks that she’s done so “without approval”–such is Scientology’s centralized control over even its most loyal members.

This centralized control is evident throughout the list. One way it’s evident is the running theme on the importance of interfaith initiatives. Scientology’s reputation precedes it and Scientology is as aware of this as anyone. One way Scientology attempts to counter or mitigate its reputation is to actively cast itself in a religious light. Since Scientology resembles a for-profit business than a religion as most would consider that term, it seeks out the company of other religious entities at the local level. But control over these interfaith initiatives comes from above.

For example, Gary Hedge “Helps with human rights PR: some interfaith“; John Chambers “Runs the Pasadena interfaith meetings“; Angie Derouchie is “Also in on the board of the Interreligious Action Network of Washington County as well as the Interfaith Council of Greater Portland so has most of the interfaith contacts.”

More importantly, this list is ample evidence of Scientology’s tight control over its “social-betterment” front groups, e.g., Applied Scholastics, The Way to Happiness Foundation, Narconon, and Criminon. Especially prevalent on the list is the Citizen’s Commission on Human Rights [CCHR], which regularly disclaims ties to Scientology. But how could this be so if Kenny Woo of the Stevens Creek, CA Org “is our paid CCHR staff.” Pat Wehner, from the same Org, “does various odd cycles for me including invest – CCHR and PR.” Or Sherry Ridenour of the St. Louis Org, who “mostly volunteers for CCHR-gettings ads placed. Working the exhibit when it’s in town; She has also helped on YHR events.” [ed: YHR = Youth for Human Rights, also a Scientology front group]

Nothing I’ve noted above should surprise anyone who has done any reading on the Church of Scientology; it’s entirely consistent with what is already known about Scientology. But unlike the plethora of anecdotal evidence from ex-members, this is documentary evidence of what is important to the Church of Scientology, how it controls its front groups, and the degree of control it exerts over even its public members (the degree of control it exerts over staff members is far greater).

• Longtime Citizens Commission on Human Rights (CCHR) head Jan Eastgate has been charged in Australia with perverting the course of justice for he role in covering up the sexual molestation of a minor by a Scientologist, fearing it would lead to bad press. It took awhile, but the bad press is deservedly here.  Village Voice summation here. It can’t be understated what a public relations nightmare this is for Scientology, as CCHR has gradually become the crown jewel of Scientology’s deceptive front group arsenal, having managed to affect legislation in various districts. Not much US media so far but hopefully that’ll change if Eastgate is convicted.

• Another exciting development is the imminent publication of two weighty books on Scientology, one by Ohio State religious studies professor Hugh B. Urban, due out in September under the title The Church of Scientology: A History of a New Religion. Tony Ortega of the Village Voice got an early peek and previews it here. The other book is by Rolling Stone writer Janet Reitman, and will be titled Inside Scientology: The Story of America’s Most Secretive Religion. It can be preordered on Amazon here, and is due out July 5.

There is a good reason this particular allegation triggered the most vehement reaction from Scientology: of all the transgressions documented by Wright, those implicating inurement are the most immediately detrimental to their tax exempt status. Religious entities considered exempt under Internal Revenue Code § 501(c) (3), as is Scientology, may not operate for the benefit of private individuals or interests. The IRS web site explicitly states, “no part of the net earnings of a section 501(c) (3) organization may inure to the benefit of any private shareholder or individual.” [emphasis added]

Few organizations know this better than Scientology, having been denied tax-exempt status on the basis of inurement before. In the decades prior to finally being awarded exempt status in the early 1990s, Scientology waged a war against the IRS. One of the more significant battles in that war was the Founding Church of Scientology v. United States case [188 Ct. Cl. 490 (Ct. Cl. 1969)] in which the Court of Claims found that Scientology’s finances were merely a personal compensation to benefit L Ron Hubbard (nearly 10% of its gross income, in fact). There is no shortage of additional precedent: See, e.g., Basic Bible Church v. Commissioner, 74 T.C. 846 (1980) (Court found inurement where nearly $33,000 received in contributions, more than $31,700 impermissibly benefited pastor for travel, home expenses); Southern Church of Universal Brotherhood Assembled v. Commissioner, 74 T.C. No. 89 (1980) (Court found a substantial amount of church income paid ministers’ and family’s rent and living expenses).

As we know, the Scientology offensive didn’t cease until the IRS finally relented in 1993 and granted them their long sought-after tax exemption. As we also know, both parties have since been notoriously tight-lipped as to the terms and context for the ostensibly “secret” deal. The IRS’s reversal of its stance on Scientology’s tax-exempt status was not only delivered in secret, it came sans any explanation as to what legal basis supported the reversal. Additionally, the IRS has subsequently defended the secrecy of their undisclosed agreement with Scientology (most notably in the Sklar I and Sklar II proceedings against the IRS).

The IRS has never offered an affirmative reason why they abruptly deemed Scientology as worthy of exempt status, after spending so many years arguing the converse. The most reasonable and benign excuse is that the IRS, from a resource standpoint, was worn down by the Scientology litigation machine, which had spawned hundreds of lawsuits, all which were withdrawn pursuant to the 1993 secret agreement. But even if one accepts this as an explanation, it cannot also be the objective basis by which Scientology earned its tax-exempt status. The “secret” agreement, which was leaked to the Wall Street Journal in 1997, simply presumes as fact that Scientology is now, suddenly, an exempt organization, with no further explanation to reconcile why they were not only a year prior.

Even if the IRS is remaining mum as to why Scientology suddenly became worthy of exempt status, we do know the bases by which a 501(c)(3) organization can jeopardize its status: (a) if its net earnings inure to an individual; (b) if it provides a substantial benefit to a private interest; (c) if it devotes a substantial part of its activities attempting to influence legislation; (d) if it participates or intervenes in any political campaign on behalf or in opposition to a candidate for public office; or (e) if its purposes and activities are illegal or “violate fundamental public policy.”

Decent arguments can be made that Scientology jeopardizes their exempt status by participating in nearly all of the aforementioned prohibited activities (save intervening in political campaigns). But proving that Scientology is so engaged is difficult for a number of reasons, the most obvious being that the type of behavior which ordinarily jeopardizes an organization’s exempt status requires documentation–documentation the corporately opaque Scientology will not surrender absent a court order. More importantly, Scientology’s natural adversary, the IRS, has essentially rejected its role as a check against Scientology’s abuse of its exempt status. Scientology doesn’t have to worry about disclosing documentation if the IRS is going to intervene on their behalf time and again. This is why a vigorous investigation of Scientology is needed.

Of all the bases undermining Scientology’s claim for exempt status, inurement would, at first glance, seem the most difficult to prove without extensive discovery into Scientology’s internal finances. Nevertheless, Brousseau’s story and pictures are prima facie evidence of inurement because the nature of the prohibited transactions alleged by Brousseau requires little more documentation than what Brousseau has provided–he served as both the quid and the quo in the transactions that bestowed private benefits upon Miscavige and Cruise. The organization pays Brousseau approximately $50 per week (which is legally squared under the “ministerial exception” to labor law, in order that Brousseau and others like him can perform “religious duties”) and Brousseau in turn performs professional, secular services (which would otherwise cost Miscavige and Cruise thousands) to private individuals, such as Scientology’s Chairman of the Board, and the Chairman’s best buddy, Tom Cruise. Simply put, that is inurement, and the IRS should investigate it, along with the dozens of similar stories.

Courts are wary of delving into the manner in which a religion organizes and conducts itself, largely because courts are prohibited by the first amendment from ruling on questions of religious orthodoxy. This wariness provides some wiggle room for religions being investigated for inurement to redefine potentially violating incidents as falling within a religious rubric. Why should a judge categorically prohibit a religious entity from refurbishing the motorcycle it bought for the head of the church? Viewed in isolation, this might be a close question. But the allegations of inurement have steadily mounted for Scientology and Miscavige and a picture is emerging that the IRS is negligent each day it ignores. One unique aspect of Brousseau’s allegation is that Tom Cruise–who is not a religious official–was a beneficiary of Brousseau’s services. Benefits inuring to Cruise do not implicate even a scintilla of grey legal space such as those benefits inuring to Miscavige, because no religious basis–not even a preposterous one–can justify the need for religious “ministers” to customize Tom Cruise’s motorcycles and S.U.V.

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