If Trump is serious, he has a clear path to go at Scientology — through his Treasury Secretary

Does Donald Trump really want to end Scientology’s tax exempt status? That’s the provocative notion that Yashar Ali floated Thursday at the Huffington Post, but Yashar included a lot of caveats about whether there was any truth to the idea, or whether a president even has the influence to make such a decision.

The suggestion that Trump wants Scientology’s exemption reviewed came from a longtime Trump aide, Lynne Patton, who in May reached out to actress Leah Remini on Twitter. In a private message, Patton said, “From the moment I saw your series, I told President Trump & his family that we needed to revoke their tax exempt status. They couldn’t agree more.”

In August, when Remini’s second season of her A&E series, Scientology and the Aftermath, was about to start, we teamed up with Jeffrey Augustine to explain why Remini’s stated aim of getting federal action about Scientology’s tax status was a tougher goal than it might have been in years past. The reason? A change in the law in 1998 reduced the number of federal employees who rank high enough to initiate such an investigation.

As we explained with the help of Jeffrey, the number of people who can make that decision today is down to three. One of them is the IRS commissioner himself, and Thursday just happened to be 78-year-old John Koskinen’s final day of his term. The president announced last month that the Treasury Department’s assistant secretary for tax policy, a man named David Kautter, will assume the role of acting commissioner until a permanent hire can be made. According to case law, the second person who can initiate an investigation is the Commissioner of Tax Exempt and Government Entities, a woman named Sunita Lough. Neither of those people, however, answers directly to the president, and it would be improper for Trump to try and influence them to start a church probe.

The third person, however, is another matter. An IRS investigation of the Church of Scientology’s special 1993 agreement can be initiated by Treasury Secretary Steven Mnuchin, who works directly for the president.

Yashar quoted former Federal Election Commission general counsel Larry Noble, who said that it would be wrong for the Trump administration to “try and influence who the IRS targets.”

“I disagree with Noble. True, it’s unusual, but unlike many other Trump interactions with his agencies, where he’s exploiting or ignoring his own conflict of interest, there’s no conflict here. Whether Scientology is organized for a proper tax exempt purpose doesn’t implicate any conflict and indeed is something the President should weigh in on,” says Scott Pilutik, an attorney who has studied the IRS and Scientology for many years.

It’s crystal clear from the law that Secretary Mnuchin has the power to initiate an investigation of Scientology’s exempt status, even if such a probe would then be handled by IRS agents who would be independent of the White House.

Of course, Scientology’s lawyers would immediately screech that Patton’s utterance was an indication of Trump being unfair, but let them. No matter how an inquiry into Scientology is initiated, Scientology will attack it with its usual scorched-earth tactics anyway.

So the question is, was Patton being truthful?

As Yashar indicated, Remini hasn’t heard from Patton since June. But in more recent days, Patton’s Twitter feed has included some praise for Scientology’s most unlikely new celebrity and someone we’ve kept an eye on for years, Princess Joy Villa.

 
We’ve documented how Villa tried numerous things to gain notoriety, from training her waist to be very small, to vegan bodybuilding, to cozying up to members of the Tom Cruise entourage. She also, with her then-fiance, donated $250,000 to the Church of Scientology to reach the status of “Patron Meritorious,” and she has reached the state of “Clear” on Scientology’s “Bridge to Total Freedom.”

At the Grammys in February, Joy Villa rocketed to fame when she showed up in a “MAGA” dress celebrating the new president. Since then she has fended off accusations that she was a Bernie Sanders supporter who had denigrated Trump supporters during the campaign and was only jumping on the MAGA bandwagon as a ploy to sell records.

And despite some Trump supporters expressing concern about her deep involvement in Scientology, Villa has managed, over the last few months, to get pretty deeply enmeshed in the White House.

 
However, we have to wonder if it’s not possible for Trump to support Joy Villa’s political ambitions while also being in favor of taking away Scientology’s special status. It’s not clear that Trump is aware of Villa’s involvement in Scientology or if it would make any difference — Joy is clearly being rewarded for being such a staunch, if recent, supporter of the president, in spite of her odd association with Hubbardism.

Anyway, it sure would be entertaining if Mnuchin or the acting IRS Commissioner, Kautter, were to get an investigation going and have the IRS review the sweet deal that was given to the church in 1993.

For those who aren’t really up to speed on why that agreement deserves to be re-examined, we’ll reproduce this portion of the dialogue from Alex Gibney’s Emmy-winning 2015 HBO documentary, Going Clear which discusses how Scientology got its tax exempt status to begin with, which played over video of David Miscavige celebrating that status at a 1993 Nuremberg-style rally…

Alex Gibney: A decade into Miscavige’s leadership, a simmering crisis finally came to a boil. For years Hubbard had insisted that Scientology was a religion and should be tax-exempt, so he had refused to pay any taxes.

Marty Rathbun: We were facing a tax bill of over a billion dollars, and the total assets, liquid and material, and property of the church was about a quarter of that at the time, in the ’80s. And so just from a real simple accounting basis, it was life and death. If we don’t get exemption, we die. If we get it, we survive.

David Miscavige: As LRH said, “one certainly couldn’t contest anyone as holy as the commissioner of the IRS, whom I believe gives God his orders.” — LRH.

Lawrence Wright: Faced with this crisis, David Miscavige formulated a strategy. Think of the nerve that it takes to decide to take on a war with the IRS.

Miscavige: The Church of Scientology Has been crucifying the federal agency for its sins on a regular basis, both in and out of courts.

Ortega: Thousands of Scientologists all filed lawsuits, not just against the IRS, but against individual IRS employees — 2,400 total lawsuits, all going at the IRS at one time. It was a litigation nightmare.

Rathbun: Being Miscavige’s right-hand man, I was in charge of all those efforts. We were not only suing them in every possible jurisdiction there was, we were investigating the IRS for crimes generally, or things that would offend the public. These hearings into IRS integrity — in the late ’80s, there were hearings about IRS abuses that had nothing to do with Scientology, had nothing to do with nonprofits, had nothing to do with churches. They had to do with Joe Taxpayer. And they we were publishing these glossy, expensive magazines.

Miscavige: In fact, the exposes of IRS crimes were so hated that possession of “Freedom” magazine was banned by IRS officials in the IRS building.

Rathbun: There is going to be an IRS conference in the Catskills, right? And so we would send a PI, find out which hotel it’s gonna be at, get down there during happy hour, socialize. And this guy’s tallying who’s drinkin’ what. And so we go through Freedom of Information Act to find out that the taxpayers are paying the bar bill, and it’s so much money. And of course, you know, in the scheme of things, it’s nothing. But from a PR perspective, it’s everything.

Miscavige: IRS officials told me to my face they weren’t interested in hearing anything I had to say because, and I quote, “You are a Scientologist. You are a mindless robot.” Well, those who know me can imagine my response. It was short, but certainly made the point.

Wright: A negotiation began to take place between the IRS and the Church of Scientology. How do you define a religion? It’s not so easy. Why is one body of thinking a religion and another body not? The only organization entitled to make those distinctions is the IRS as an agency — very poorly equipped to do that. I mean, they’re mainly accountants and lawyers. They’re not theologians. But it’s the only opinion that matters. Once the IRS has decided that you are a religion, then you are protected by the vast protections of the First Amendment.

Miscavige: And, as the saying goes, The rest is history. On October the first, 1993, at 8:37 pm Eastern Standard Time, the IRS issued letters recognizing Scientology and every one of its organizations as fully tax-exempt — the war is over!

Gibney: The war ended because the IRS surrendered. It forgave the billion-dollar tax bill and granted Scientology its tax exemption. Even Hubbard’s novels were declared religious texts, their sales exempt from taxes.

Ortega: What happened is that Fred Goldberg, who was the IRS commissioner at that time — Miscavige let Goldberg know that if we could find a way to get tax-exempt status, all those lawsuits will go away overnight.

Rathbun: And as we were going out the door, Fred Goldberg goes, “Is he serious?” And I said, “yeah.” And he sort of breathed this sigh of relief, kind of nodded, and smiled.

Gibney: At the church’s victory party, Miscavige projected photos of the church’s executives celebrating with IRS officials.

Rathbun: It created this tremendous juggernaut of tight conspiracy of the membership that then existed, but what it really did was enable Miscavige to milk every last dime out of that core membership.

Miscavige: I am proud to announce the discrimination is over. Your tax dona– deductions on donations to Scientology will no longer be disallowed by the Internal Revenue Service.

 
During the two-year review which preceded that October 1, 1993 decision, Scientology made a lot of promises to the IRS in order to get its precious exempt status. It promised to give refunds, for example, which in the years since Scientology has notoriously failed to do. And there are plenty of other grounds for re-examining the agreement, if only one could be initiated.

We’re sure, for example, it will go over really well that David Miscavige was using tax-exempt funds to pay private investigators $10,000 a month in cash to follow around and spy on his own father, Ron Miscavige.

Fun stuff.

Hey, Jeffrey Augustine wanted us to remind you that he has a petition going to encourage the IRS Commissioner to initiate an investigation.

Suddenly, that petition seems like a much more effective tool.

 
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Posted by Tony Ortega on November 10, 2017 at 00:00

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Our book, The Unbreakable Miss Lovely: How the Church of Scientology tried to destroy Paulette Cooper, is on sale at Amazon in paperback, Kindle, and audiobook versions. We’ve posted photographs of Paulette and scenes from her life at a separate location. Reader Sookie put together a complete index. More information can also be found at the book’s dedicated page.

The Best of the Underground Bunker, 1995-2016 Just starting out here? We’ve picked out the most important stories we’ve covered here at the Undergound Bunker (2012-2016), The Village Voice (2008-2012), New Times Los Angeles (1999-2002) and the Phoenix New Times (1995-1999)

Learn about Scientology with our numerous series with experts…

BLOGGING DIANETICS: We read Scientology’s founding text cover to cover with the help of L.A. attorney and former church member Vance Woodward
UP THE BRIDGE: Claire Headley and Bruce Hines train us as Scientologists
GETTING OUR ETHICS IN: Jefferson Hawkins explains Scientology’s system of justice
SCIENTOLOGY MYTHBUSTING: Historian Jon Atack discusses key Scientology concepts

Other links: Shelly Miscavige, ten years gone | The Lisa McPherson story told in real time | The Cathriona White stories | The Leah Remini ‘Knowledge Reports’ | Hear audio of a Scientology excommunication | Scientology’s little day care of horrors | Whatever happened to Steve Fishman? | Felony charges for Scientology’s drug rehab scam | Why Scientology digs bomb-proof vaults in the desert | PZ Myers reads L. Ron Hubbard’s “A History of Man” | Scientology’s Master Spies | Scientology’s Private Dancer | The mystery of the richest Scientologist and his wayward sons | Scientology’s shocking mistreatment of the mentally ill | Scientology boasts about assistance from Google | The Underground Bunker’s Official Theme Song | The Underground Bunker FAQ

Our Guide to Alex Gibney’s film ‘Going Clear,’ and our pages about its principal figures…
Jason Beghe | Tom DeVocht | Sara Goldberg | Paul Haggis | Mark “Marty” Rathbun | Mike Rinder | Spanky Taylor | Hana Whitfield