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A Times Editorial

IRS should review Scientology tax-exempt status

The curtain shielding the Church of Scientology's high-pressure fundraising in Clearwater and elsewhere has been raised, and the view is not pretty. In a revealing St. Petersburg Times series, former Scientology fundraisers detail the coercive methods they used in their desperate efforts to meet weekly quotas. Former church members describe how they were repeatedly harassed into making contributions and buying Scientology materials they could not reasonably afford. The revelations warrant a review by the Internal Revenue Service of Scientology's practices and a debate in Congress about requiring more openness from religious institutions about their finances.

The Times' series by Joe Childs and Thomas C. Tobin offers an unprecedented inside look at Scientology's continuous money machine and the strategies used to keep it humming. Scientology brings in $100 million a year just from services sold in Clearwater, and former fundraiser Hy Levy recounted being paid $50 a week for years to meet weekly sales targets of $200,000 and higher. Former church members recounted how they were intimidated into giving money by repeated phone calls, unexpected visits to their homes and intimidating encounters on church property. Church officials say they are "very proud'' of the donations and insist the contributions are voluntarily made by members who want to support the organization. That characterization is at odds with the first-hand accounts by the former fundraisers and donors in the Times series.

The remarkable pressure created by the Scientology money machine is felt by all sides. Levy and other fundraisers described being verbally berated by supervisors, fed meals of rice and beans, and forced to wash dishes if they failed to meet their weekly quotas. Former church members described how they were pressured to max out credit cards, home equity lines of credit and tap other sources of money for counseling or Scientology materials. While the church says its fundraising practices are no different than those used by other religious institutions, the year-round obsessive fundraising and Scientology's aggressive tactics are not commonly associated with other religions.

Beyond the constant pressure to contribute, two of Scientology's practices are particularly concerning and legally suspect. The Times found seven members of Scientology's religious order debited the church accounts of parishioners for materials they had not ordered. One victim, Carisa Marion, called it "stealing" in a written complaint to the church and eventually got her money back. The church acknowledged the unauthorized transfers but called them "isolated instances of unauthorized debits.'' In other cases described by Levy, Scientology supervisors monitored sales pitches by using hidden microphones in offices or listening in on telephone calls. State law bans secret monitoring of conversations when people have a "reasonable expectation" of privacy, and all parties must give prior consent. Church officials insist the use of microphones is legal and church members are told, but at best the practice skirts the intent of Florida law. It also is at odds with common practices used by other religious institutions as they seek contributions from their members.

The Church of Scientology's fundraising pitches are varied and creative. Donations are sought for services sold in Clearwater and for the International Association of Scientologists. Former church members described high-pressure tactics to sell individuals multiple copies of digitized recordings and new versions of texts by Scientology founder L. Ron Hubbard. Other pitches focused on new construction such as the Super Power building in Clearwater, which the Times reports was used to raise millions more than what Scientology officials once said the project would cost. No wonder the building sat empty all of those years.

Despite the church's claims to the contrary, Scientology does not appear to be the organization it claimed to be when the IRS granted it the coveted tax-exempt status in the 1990s. Former members describe a much more difficult process for obtaining refunds. Many more church staffers appear to be involved in fundraising than officials claimed at the time. The money raised also has increased substantially. The Church of Scientology never should have been granted tax-exempt status, and the IRS should revisit that decision. Short of that, there is more than enough public information available to justify an IRS audit to determine if a reasonable amount of proceeds are spent for tax-exempt purposes.

IRS should review Scientology tax-exempt status 11/20/11 [Last modified: Sunday, November 20, 2011 3:30am]
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