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An Internal Revenue Service ruling in 1967
stripped Scientology's mother church of its tax-exempt status. A
federal court ruled in 1971 that Hubbard's medical claims were bogus
and that E-meter auditing could no longer be called a scientific
treatment. Hubbard responded by going fully religious, seeking First
Amendment protection for Scientology's strange rites. His counselors
started sporting clerical collars. Chapels were built, franchises
became "missions," fees became "fixed donations," and Hubbard's
comic-book cosmology became "sacred scriptures.'
During the early 1970s, the IRS conducted its
own auditing sessions and proved that Hubbard was skimming
millions of dollars from the church, laundering the money through
dummy corporations in Panama and stashing it in Swiss bank
accounts. Moreover, church members stole IRS documents, filed
false tax returns and harassed the agency's employees. By late
1985, with high-level defectors accusing Hubbard of having stolen
as much as S200 million from the church, the IRS was seeking an
indictment of Hubbard for tax fraud. Scientology members "worked
day and night" shredding documents the IRS sought, according to
defector Aznaran, who took part in the scheme. Hubbard, who had
been in hiding for five years, died before the criminal case could
be prosecuted. -- Excerpt from 1990 Time Magazine article "The Thriving Cult of Greed and Power".
In 1993 The Church of Scientology was granted tax exempt status by the Internal Revenue Service...
Read more about the IRS agreement:News Articles:
The Shadowy Story Behind Scientology's Tax-Exempt Status -- New York Times, March 9, 1997
Intimidating the IRS-- St. Petersburg Times, March 11, 1997
Editorial: Who Can Stand Up?--
New York Times, March 16, 1997
The Selling of a Church, Shoring Up Its Religious Profile, The church has adopted the terminology and trappings of traditional theologies. But the IRS is not convinced.- Part 2 of the LA Times series on Scientology -- June 25 ,1990
Attack the Attacker, The Battle with the I.R.S., Neither Side Blinks in a Lengthy Feud - Part 6 of the LA Times series on Scientology -- June 29,1990
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