IRS Is Seeking Church's Records

Source: St. Petersburg Times
Date: January 20, 1990

The Internal Revenue Service is seeking scores of internal documents from the Church of Scientology in Clearwater to determine whether the organization has violated its tax-exempt status.

The IRS has sent a summons to the Scientologists asking for internal documents such as bank statements, minutes of Scientology board meetings, organizational charts and job descriptions.

The documents could show whether the organization is involved in commercial enterprises for profit, IRS agent Melvin Blough testified Friday in a hearing before a federal magistrate.

So far, the Scientologists have not agreed to hand over the documents.

The IRS is seeking documents from a group called the Church of Scientology/Flag Service Organization in Clearwater, which has several hundred staff members and generally is considered Scientology's international spiritual headquarters.

Scientologists from around the world travel to Clearwater for training and for a counseling process called "auditing," some of it offered in the Fort Harrison Hotel, nicknamed "Flag."

Critics charge that the group is a cult, or merely a money-making organization. Scientologists insist that it is a religion, but they have clashed with government authorities over that point in the past and on whether Scientology groups deserve the tax-free status given to churches.

In the recent case, the IRS is seeking to review the documents - 47 categories of them - because it has information indicating that the organization might not have been worthy of tax-exempt status during 1985, 1986 and 1987, court records show.

If the IRS determines the organization should not be considered tax-exempt for those years, the agency will seek payment of back taxes.

Paul B. Johnson of Tampa, an attorney for the Scientologists, said the government is required to prove a need for the documents before it can review them. A hearing on that issue before U.S. Magistrate Elizabeth A. Jenkins is scheduled to resume Thursday.

Some of the documents would be used to examine the Clearwater organization's links to other Scientology groups, Blough testified Friday.

In a separate legal action, Pinellas County is seeking payment of back property taxes from the Flag Service Organization.

Scientology was founded by the late L. Ron Hubbard, who was a science fiction writer and author of Dianetics: The Modern Science of Mental Health. The book said man's path to spiritual freedom is blocked by negative experiences that can be purged through "auditing."

( categories: )