“If the IRS does, in fact, give preferential treatment to members of the Church of Scientology—allowing them a special right to claim deductions that are contrary to law and rightly disallowed to everybody else—then the proper course of action is a lawsuit to put a stop to that policy.”

Silverman doesn’t get into the fact that any person bringing such a suit would be denied on standing grounds; and actually, Keith Henson did bring such a suit, which was in fact denied on standing grounds. The standing argument was discussed by the second Ninth Circuit panel, which ultimately found the same way and declined to explore the matter in any depth. At oral argument, though, the following exchange took place:

Judge Wardlaw: “The view of the IRS is it can unconstitutionally violate the Constitution by establishing religion, by treating one religion more favorably than other religions in terms of what is allowed as deductions, and there can never be any judicial review of that?”
IRS (Delsole): “That is not at all what I said.”
Judges Pregerson & Wardlaw (simultaneously): “That’s the bottom line!”
Judge Wardlaw: “This does intrude into the Establishment Clause.”

There’s your dicta. Lots of judges fully recognizing that Scientology is getting a better deal from the IRS than any other religion, but all powerless to do anything about it. What I was hoping in in the Sklars cases was for them to remand after discovery and consideration of the IRS/Scn agreement–the Sklars didn’t deserve the deduction, but at least they might have dragged down Scientology.

I did not read the Sklars decision, although I plan to at one point. Do you know if there was any important dicta that shows any sliver of understanding about the strange nature of the IRS’ fierce protection of this document? I wonder what justification they gave to protect it. It seems strange that no one has been able to unveil that agreement officially in all of these years.

You are correct that the IRS likely believes that hoards of new law suits would commence if they revoked the 503(c) status (and I also agree with you about the 501(c)(4) irregularities that snowballed into the stupid current scandal), but I’m second guessing the number of new plaintiffs the cult would be able to scramble together. It seems odd that the IRS crumbles when they have several hundred lawsuits when they govern over 200 million tax payers. They must be constantly skating on funding thin ice and very much afraid of the cult. But do you think it is possible to get that many Scientologists to act as Plaintiffs when they can barely get 400 people to the Portland event?

I simply don’t see why they couldn’t take down Miscavige for illegal inurement, or tax evasion. Not likely he pays taxes on his extravagant lifestyle. Trying to take down this insidious cult can happen if you cut off the head of the snake. This would be (I’m guessing) a lot easier than facing hundreds of new lawsuits.

Love the blog, by the way. It is great to have a direct dialogue with you.

If you look back at the oral argument before the ninth circuit in the Sklars case, you’ll see the IRS vigorously and recently defending the secrecy of the IRS-Scientology agreement, which the Sklars sought to have admitted to evidence in order to make their disparate treatment argument. Gov’t agencies can change course on a dime, but I don’t see how anything has really changed.

At the end of the day, is there any reason for the IRS to believe that if they rescinded Scientology’s exempt status, Scientology wouldn’t simply pick up where it left off and unleash a thousand lawyers on the IRS? What’s changed between now and then? Not much; if anything the IRS has grown weaker if only because of this supposed scandal. (I say supposed because to my eye this was the IRS doing its job–501(c)(4) entities are ostensibly “social welfare groups” and any indication that a group is political should be a tip off that they’re merely organized to provide anonymous campaign donations; that groups on the Right sought to exploit this more than the Left accounts for the disparity.)

But so has Scientology grown weaker since 1993. Morally speaking, there might be no more apt time in its history where Scientology is less deserving of exempt status. Scientology under Miscavige has shed even the pretense of a corporate structure with internal checks and balances pinned to a trust or mission statement. Instead it’s merely an elaborate group of shell corporations that enables David Miscavige to profit and exert his violent temper and arbitrary will without fear of reprisal.

I suppose this reality weakens Scientology’s substantive claim to exempt status, but it has no fewer attorneys at its disposal than in 1993, so I’m not really sure how much has changed if you’re in the IRS’s chair making such a calculus.

I would like to think that the current scandal and replacement of top IRS brass will trigger a review of all IRS policies and procedures, and I like to think that the IRS will start seriously investigating Scientology to prove that they look at everyone.regardless of any political and religious affiliation.

But then I snap out of that dreamworld and know that it probably won’t happen. The IRS seems to have a very long memory and cower in fear when it comes to Scientology. What are your thoughts?