SCIENTOLOGY SETTLEMENT REVEALED

The Church of Scientology revealed in early January that it had paid the Internal Revenue Service $12.5 million in a 1993 settlement that established its tax-exempt status. Called a “closure agreement,” the multi-million dollar settlement concluded a battle between the two entities which began in 1967. The IRS had maintained that the church should forfeit its tax-exempt status because they said it was a “for-profit business” that benefited church officials. The church responded by filing more than 2,000 lawsuits against the IRS.

Mark Rathbun, the church’s director of Religious Technology, confirmed to the Associated Press previously undisclosed information regarding the erstwhile arrangement first reported on in The Wall Street Journal.

Under the settlement, the church agreed to dismiss its suits and pay the $12.5 million to satisfy any tax liability previous to 1993. And while additional compensation is possible, the IRS said it would forgo any outstanding audits of the church and its organizations. It also stated that its ruling to grant tax-exempt status to the church was “based upon voluminous information provided by the church to the IRS regarding its financial and other operations.”

Church members will be permitted to deduct from their personal income taxes the fees they incur for “auditing.” Auditing is a Scientology procedure which, the church says, frees a person of false brain programming and purges negative thoughts.

The Church of Scientology was founded by science fiction writer L. Ron Hubbard in 1954. He died in 1986.

—MKG

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