Petition: We Demand the IRS Commissioner Begin an Investigation into Scientology’s Tax Exempt Status

Shocking But True: There are only three people in the entire US Government who can call for an investigation into Scientology’s tax exemption. I outlined this in my previous detailed article on the IRS. The cut-to-the-chase version for non-wonks was published by Tony Ortega.

Bottom Line: In order to maximize our collective power, we need to petition the IRS Commissioner John Koskinen to open an investigation into Scientology’s tax exemption. Accordingly, I am asking everyone to please sign and share my Change.Org Petition: We Demand the IRS Commissioner Begin an Investigation into Scientology’s Tax Exempt Status. You do not need to be a US citizen to sign the petition.

Leah Remini and Mike Rinder are doing an incredible job and we need to support their work. This petition is all about a call to action whereby we demand the IRS do its job and open an investigation into Scientology’s tax exemption.

Click here to go to the petition.

IRS Commissioner Mr. John Koskinen has the legal and statutory authority to open an investigation into the Church of Scientology’s 501(c)3 tax exemption. We demand Commissioner Koskinen open an investigation for the following reasons:

1. Scientology’s lack of corporate governance as it represented to the IRS in its 1023 application for tax exemption. David Miscavige is the managing agent of Scientology and has pierced all corporate veils. Scientology is the alter ego of David Miscavige and he wields unchallenged and dictatorial control.

2. Scientology’s refusal to grant refunds or repayments to dissatisfied members as it represented to the IRS in its 1023 application for tax exemption.

3. Scientology use of tax-exempt dollars to engage in harassing former members, critics, and journalists. One example is the use of tax-exempt dollars to create slanderous hate websites and videos against former members, critics, and journalists who speak out and expose Scientology’s inhumane practices.

4. Scientology’s internal cover-ups of child sexual abuse and rape as described by the very victims of the sexual abuse and rape.

5. Scientology use of tax-exempt dollars to hire private investigators to spy on, stalk, and harass former members, critics, and journalists who speak out and expose Scientology’s inhumane practices. This is Scientology’s malicious policy of Fair Game and it is funded by tax-exempt dollars.

6. Scientology’s abuse of US religious worker visas to recruit non-US citizens to work in the Sea Org. Once in the US, these non-Americans have their passports confiscated and are forced to work 100 hour work weeks for wages far below the poverty level. Sometimes these workers receive no pay at all for weeks or months on end.

7. Scientology’s use of onerous contracts of adhesion to strip Scientologists of their legal and civil rights.

8. Scientology’s use of child labor.

9. Scientology’s predatory fundraising practices and use of commission salespeople to raise money.

10. Scientology’s use of a system of brutal and inhumane gulags known as the RPF (Rehabilitation Project Force). The RPF is a thought reform camp used to crush dissent. People in the RPF are often imprisoned for years and are stripped of their civil and legal rights.

11. The forced breaking up of families by Scientology’s inhumane practice of Disconnection.

Leah Remini calls for federal action: Here’s the frustrating reason the IRS may not answer


Note: This is a companion piece to the question and answer session Tony Ortega and I had at the Underground Bunker.


What would it take to get the IRS to commence an investigation into the revocation of the Church of Scientology’s 1993 tax exemption?

At the minimum, it would take an IRS Regional Commissioner to call for a revocation hearing.  Unfortunately, the position of Regional Commissioner was eliminated by Congress in the IRS Restructuring and Reform Act of 1998 (enacted July 22, 1998), an act implemented between 1999 and 2000.  During this implementation period, the existing Regional Commissioners retired or were transferred to other positions.


Because the IRS has no Regional Commissioners, the IRS is effectively barred from undertaking any civil audits of churches.

Why is this?

It is the result of a disastrous loophole unintentionally created by the US Congress. IRS Code (IRC) Section 7611 mandates that the IRS cannot initiate a civil audit of a church — or an organization claiming to be a church — without the express approval in writing of a Regional Commissioner.  However, when Congress passed the IRS Restructuring and Reform Act of 1998, it made no provision for a substitute church audit process under section 7611. This created a loophole big enough for any church to drive through.

How was such a mistake allowed to occur?

The IRS and its sprawling bureaucracy is a part of the US Department of the Treasury. The US Congress held hearings on the IRS in 1996 and 1997. As a result of these hearings, it was determined that Congress needed to restructure the IRS and update the ways in which the IRS operates. Hence,  the IRS Restructuring and Reform Act of 1998. For whatever reasons, the issue of church audits was either overlooked or was just not on the radar of the Congress or the US Department of the Treasury. Indeed, the IRS itself did not discover the problem until 2009.

Bottom Line: Because the issue is one of statutory language, it cannot be remedied by Treasury regulations or other non-statutory guidance. What is needed is for Congress to amend the IRS Restructuring and Reform Act of 1998 to address this loophole.

A few IRS audits of churches were started but were quickly closed when the IRS’ lack of authority to conduct such audits was challenged in court. A landmark example of such a challenge is the case United States of America vs. Living Word Christian Center (Civil No. 08-mc-37 ADM/JJK) This case was tried in the US District Court of Minnesota. In its ruling the Court specifically bound the IRS to the loophole in the IRS Restructuring and Reform Act of 1998. This is important and well worth reading to educate yourself:

In April 2007, the Internal Revenue Service (“IRS”) began investigating Living Word Christian Center (“LWCC”) after receiving reports that LWCC may be engaging in conduct, including improperly conferring economic benefits on its senior pastor Reverend James M. Hammond, which may jeopardize its tax-exempt status.

The IRS sent LWCC a notice signed by Marsha A. Ramirez, the Director of Exempt Organizations, Examination (“DEOE”), that it was opening a church tax inquiry. LWCC responded to the notice, and its response caused the IRS to open a church tax examination of LWCC’s records. Before that examination could take place, LWCC asserted that the IRS’s notice was defective because it was authorized by the DEOE who is not an appropriate high level Treasury official. The IRS then issued an administrative summons to LWCC asserting that it needed the information sought in the summons to determine whether LWCC’s tax-exempt status as a church is legitimate. When LWCC refused to comply with the summons, the IRS petitioned the Court for an order directing LWCC to comply in full. After a thorough examination of the issues and two rounds of briefing, Judge Keyes denied enforcement of the summons because the DEOE is not an appropriate high-level Treasury official to make the “reasonable belief” determination required before an examination of a church’s records can occur.

A. Standard of Review

In reviewing an R&R [Report and Recommendations], the district court “shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” 28 U.S.C. § 636(b)(1)(C); see also D. Minn. LR 72.2(b). A district judge “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” Id. To obtain judicial enforcement of an administrative summons, the Government must establish a prima facie case by demonstrating that (1) the IRS investigation is being conducted pursuant to a legitimate purpose; (2) the inquiry may be relevant to that purpose; (3) the IRS or Commissioner does not currently possess the information sought; and (4) the administrative steps required by the Internal Revenue Code have been followed. See United States v. Powell,379 U.S. 48, 57-58 (1964). The Internal Revenue Code specifies a church tax inquiry may begin only after notice and if:

an appropriate high-level Treasury official reasonably believes (on the basis of facts and circumstances recorded in writing) that the church . . . may not be exempt by reason of its status as a church, from tax . . . or . . . may be carrying on an unrelated trade or business . . . or otherwise engaged in activities subject to taxation under this title.

26 U.S.C. § 7611(a)(1), (2). An “appropriate high-level Treasury official” is defined as “the Secretary of the Treasury or any delegate of the Secretary whose rank is no lower than that of a principal Internal Revenue officer for an internal revenue region.” 26 U.S.C. § 7611(h)(7). Upon the enactment of this statute and following a formal notice and comment period, the IRS determined that an appropriate high-level Treasury official was a “Regional Commissioner (or higher Treasury official).” Treas. Reg. § 301.7611-1T, Q&A (1).

The difficulty in applying the statute to this case was created by the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105-206, § 1001(a), 112 Stat. 685 (1998), which eliminated the position of Regional Commissioner. Congress did not amend the definition of “appropriate high-level Treasury official,” and the IRS has not, in the ensuing years, undertaken any rule-making procedures to amend its own definition. Instead, the IRS delegated authority to other IRS officials to assume the former responsibilities of the Regional Commissioners. See Delegation Order 193 (Rev. 6) (last revised November 8, 2000). In the instant case, the DEOE was the individual who made the reasonable belief determination required by 26 U.S.C. § 7611. See Internal Revenue Manual § (June 1, 2004).

Because the enforceability of the summons turns on the IRS’s interpretation that the DEOE is an appropriate high-level Treasury official, the Court must make a determination of the level of deference afforded to that interpretation. Judge Keyes determined that Skidmore deference applies, and the Government does not contend otherwise…

Judge Keyes ultimately found that the IRS’s interpretation was not persuasive and thus not entitled to deference. Instead, he found that an important constitutional interest underlies the requirements of a church tax inquiry—First Amendment protections against the Government’s possible intrusion into religious affairs. R&R at 25. Congress created § 7611 to balance the rights of legitimate churches with the need for the IRS to investigate and eliminate church tax avoidance schemes. Id. Judge Keyes found that given the balancing of the constitutionally protected rights, the person responsible for determining “reasonable belief” should have broad responsibility and experience and have a high-profile position that would make it likely she has a heightened understanding the political and policy interests at stake. Id. Prior to the 1998 reorganization, the designated person was the Regional Commissioner, an official only one management level removed from the Commissioner of the IRS. Id. at 28. Judge Keyes reasoned that the DEOE, on the other hand, is four management levels removed from the Commissioner of the IRS and therefore is not the “high-level Treasury official” envisioned by Congress to properly serve the balancing function. Id. at 29. The nearest equivalent to the Regional Commissioner under the current IRS organization is the Commissioner Tax Exempt and Government Entities (“TEGE”). Id. at 27.

Given the loophole, the IRS is virtually powerless to do anything about the Church of Scientology or any other church. The one caveat is that the only church audits not governed by Section 7611 are civil fraud and criminal cases. Thus, if evidence of civil fraud or criminal activity is discovered and exposed by a whistleblower, a Scientology Sea Org member, or a Scientology parishioner, the IRS can address these matters. So can the IRS Criminal Investigation Division, the FBI, the Department of Justice and other agencies.

Three  government officials who can call for an investigation into Scientology’s tax exemption are:

  • The Commissioner Tax Exempt and Government Entities Ms. Sunita Lough
  • IRS Commissioner Mr. John Koskinen
  • US Secretary of the Treasury Mr. Steven Munchin

Raising public awareness is necessary. The public should definitely contact these officials and demand that they open an investigation into the Church of Scientology’s 1993 tax exemption. And keep filing Form 13909 complaints against the Church of Scientology as a record against the day when the IRS opens, or is ordered to open, an investigation against Scientology. Easy and quick instructions on how to file a Form 13909.

Finally, one question lingers for the IRS. In its 1993 Closing Agreement with the Church of Scientology, the Final Draft of which was leaked by the Wall Street Journal in 1997, the IRS included this stipulation:


There are legitimate questions of fraud and misrepresentation of material fact by the Church in its 1991 1023 application for 501(c)3 tax exemption. Most notably, the Church represented that there was a system of corporate checks and balances in the Scientology when, as so many have alleged and shown, David Miscavige has collapsed these checks and balances and become the sole managing agent of Scientology and therefore pierced the corporate veils.


  1. United States of America vs. Living Word Christian Center (Civil No. 08-mc-37 ADM/JJK) — Memorandum Opinion and Order:
  2. United States of America vs. Living Word Christian Center (Civil No. 08-mc-37 ADM/JJK) — Report and Recommendation:

    The Scientology Horribleness Law: The longer Scientology has its tax exemption the more its horribleness increases:

Hollywood Reporter: Narconon & Forged Court Orders

Hollywood Reporter: Scientology Anti-Drug Program: Fabricated Court Orders Suggest Attempt to Silence Critics

Nearly a decade after Scientology prompted a high-profile internet protest movement — sparked when the church attempted to remove a damaging YouTube video of member Tom Cruise speaking about the religion — comes the discovery of a new covert campaign to subvert online criticism of the organization’s social work. A series of forged court orders were submitted to Google (and possibly to Yahoo and Bing as well) in 2016 in an attempt to convince the search giant to expunge links to written objections to Scientology’s controversial anti-drug program Narconon. The U.S. Department of Justice declined to comment when asked whether it is investigating the issue, which involves the bogus signatures of judges from multiple states…

The fabricated court orders were brought to THR’s attention by Eugene Volokh, a noted UCLA legal scholar who specializes in free speech and religious freedom law. He discovered them while researching online content removal requests in a digital Harvard archive of takedown legal notices, provided in part by Google.

Murky and unknown agents appear to be doing something illegal once again. This time the allegation is that an unnamed party, or parties, is forging court orders in an attempt to clean up the toxic reputation of Narconon by getting Google and other search engines to deindex search results that are critical of the controversial “drug treatment” program.  David Miscavige is the licensor of Narconon. Has he been made aware of this activity?

This is great investigative work on the part of UCLA’s Dr. Eugene Volokh and excellent reporting by the Hollywood Reporter.

Examples of the Narconon forgeries provided to me by Dr. Volokh:




Scientologist on Twitter Admits Scientology’s Purpose to Annihilate Psychiatry

While Scientology’s phony STAND group screams about discrimination, Scientologist and OSA operative John Alex Wood skipped the religion angle and went straight for the jugular on Twitter when he candidly and publicly admitted the true purpose of Scientology’s Citizens Commission on Human Rights (CCHR):

This tweet is important to expose as it shows Scientology’s naked fascist aggression and actual intent to destroy psychiatry on a global basis.

There are law enforcement agencies that distribute literature from Scientology’s front group Foundation for a Drug Free World. These agencies need to be informed that whenever they distribute this literature they are, unwittingly, aiding and abetting Scientology’s goal to annihilate to psychiatry on a global basis.

For more information on Scientology’s infiltration into police departments, see our previous article How Scientology hooks public officials on its addictive anti-drug front.

These are the books Scientology gets into the hands of police departments:

The Church of Scientology then uses photos of police officers distributing these booklets in its PR. Scientology’s overt goal is to get smiling cops holding Scientology literature. But behind these photos ops we find a more sinister and covert purpose: Police agencies are being unknowingly used as part of Scientology’s war to destroy psychiatry. Moreover, police agencies are also being used to steer drug addicts to Scientology’s bogus $35,000+ drug treatment program Narconon.

See our previous article: The Real Truth of Scientology’s Narconon Drug Treatment Program is Body Thetans


Scientology’s Latest Hypocrisy

Scientology is rightly and widely criticized for its barbaric practices of Disconnection; character assassination; spying on people; the use of child labor; and many other incredibly inhumane practices. Rather than acknowledging these things and implementing reforms, Scientology ignores it all in favor of using a standard old ploy. This old ploy is for Scientologists to feign righteous indignation and claim religious persecution. Scientology will not change its brutal and lying ways and so it screams that it is the victim of bigotry.

Scientology’s latest tax-exempt scam is STAND, an acronym meaning “Scientologists Taking Action Against Discrimination.” STAND is presently waging a campaign on social media. STAND is largely a reaction to the enormous success of Leah Remini’s show Scientology And The Aftermath.

As part of STAND’s attack it is attempting to shame the sponsors of Leah’s show. This is quite hypocritical coming from a cult that has no shame and once conned a brain-damaged man out of his life savings. See: BRAINED-Raul-Lopez-Scientology-Story

As a part of STAND’s efforts, Walgreens, GMC, Little Caesars, Carl’s Jr., Bud Light, Geico and other companies are being singled out on STAND’s bizarre website. STAND is also insisting that everyone should sign Scientology’s ridiculously self-serving Charter on Journalistic Ethics in Relation to Respect for Religion or Belief.

This charter has Scientology pontificating to the media and demanding censorship:

A responsible media avoids discriminatory or denigrating references to religious beliefs and spiritual values…

A responsible media refrains from reinterpreting, misinterpreting, analyzing, assessing or examining religious beliefs or the expression of these beliefs. Instead, it maintains a strict duty of neutrality and objectivity—accepting what the religion puts forward as its true beliefs without disapproval, contempt, condescension, bias or ridicule.

The Church of Scientology wants to hold the media to the same standard as the US Government:


Scientology is so addicted to the crack cocaine of First Amendment religious protections that it actually thinks the secular for-profit media has an obligation to refrain from commenting on religious matters. Scientology actually expects the media to take religious pronouncements at face value. This is absurd. If the media did not challenge the statements and claims of all religions then priests could rape children with impunity; televangelists could endlessly swindle poor people with promises of prosperity; and Scientology could continue to con brain-damaged people out of their life savings. In a free society, the media can and must challenge the status quo, corruption, the powerful, and everything else.

Furthermore, Scientology will not publicly own up to its Xenu cosmology and therefore demands that the media refrain from ever mentioning this matter. Scientology seriously expects the media to remain silent, or at least neutral, on the matter of Xenu. This is both silly and unrealistic. The job of a free press is to analyze, dissect, expose, discuss, and even lampoon people, institutions, and belief systems. And yet the Church of Scientology is so deluded that it actually thinks it should get a free pass by screaming that it is a victim — and this even as it continues to destroy people spiritually and financially, break up families, and disgracefully treat its Sea Org members as chattel.

A recent tweet linked to a STAND article that attempted to shame the insurance company Geico for sponsoring Leah Remini’s show. It seems that some Scientologists are calling for a cancellation of Geico policies currently held by Scientologists. This tweet is unintentionally funny as it shows very little commitment:

The problems with Scientology boycotting or “naming and shaming” Geico are enormous:

1. Geico is a division of Warren Buffet’s Berkshire Hathaway, a company whose 2016 revenue was $223.6 billion USD. A more meaningful protest by STAND would require the naming and shaming of Geico parent Berkshire Hathaway and the many companies it owns or holds a significant interest in. These companies include American Airlines, American Express, Apple,  Charter Communications, UPS, IBM, Coca-Cola, MasterCard, Johnson & Johnson, Visa, Costco, Wal-Mart, Duracell, Verizon, Wells Fargo — and just keep going. The list is very long.

2. Scientology’s salespeople, its so-called regges, are helping to enrich Berkshire Hathaway each and every time a Scientologist pays for Scientology’s goods and services with a MasterCard, Visa, American Express, or a Wells Fargo credit card. Likewise, credit cards offered by American Airlines, Delta Airlines, Costco, Bank of New York Mellon, Goldman Sachs, and US Bancorp also help to enrich Berkshire Hathaway. Why isn’t STAND calling for a boycott of these credit card companies? Is boycotting credit card companies hitting too close to home for the money-obsessed Church of Scientology? The answer is a definite yes. Scientology management would likely argue, “by all means cancel your Geico policy as a gesture, but leave AMEX and the rest of the credit card companies the hell alone!”

3. Geico is the second largest auto insurer in the USA and insures over 24,000,000 vehicles. Scientology has perhaps 20,000 – 25,000 members. Therefore, even if all Scientologists were insured by Geico and cancelled, this would only represent 1/10th of 1% of the vehicles insured by Geico. This number is statistically insignificant. Geico’s own website shows 2016 “admitted assets” of $ 27,197,917,293 USD. The incredible shrinking cult of Scientology lacks the power to financially harm anyone except its own members.

4. Leah Remini’s show is available on television, the internet, and all digital devices that can stream television programs. If STAND wanted to boycott all platforms capable of streaming Leah’s show, then STAND would logically name and shame Microsoft, Apple, IBM, Oracle, Adobe, and every other software company and hardware manufacturer whose products contribute to the broadcast of Leah’s show.

5. In order to punish all guilty parties that contribute to Leah’s show, STAND would need to call for a comprehensive boycott of the vast integrated electrical grid and communications network that underlies television, the internet, and mobile devices. This sprawling global network includes hydroelectric power plants; satellites; cell towers; microwave towers; and millions of miles of fiber optic cable and electrical wiring. In the US alone, internet server farms operate more than 100 million hard drives that contain in excess of 350 million terabytes of data.

The Church of Scientology’s STAND group does not seem to comprehend the enormous technical, communications, and financial infrastructure in which Leah Remini’s show Scientology: The Aftermath exists. STAND cannot boycott or shame this infrastructure in any meaningful way whatsoever.

The reason that virtually all this enormous electrical, industrial, technical, and communications, infrastructure exists is capitalist in nature. This infrastructure generates tens of trillions of dollars each year. Commercial broadcasting exists to make money. The Constitutional basis of commercial broadcasting in America is the First Amendment right of free speech. Leah Remini is engaging in free speech in order to expose the depredations of the Church of Scientology. Leah’s show is a hit and it is making money. That is how commercial broadcasting works in a capitalist society: Any company or individual can use broadcasting to engage in social justice; in raising public awareness of issues; or to expose crime and fraud — and they can make money doing it.
That is how the system works. The CBS show 60 Minutes first aired on September 24, 1968 and has made CBS a great deal of money by specializing in exposing scams and frauds.

Likewise, Scientology has made a fortune peddling its wares. What does Scientology have to complain about? It has profited enormously from its First Amendment protections and yet hates it when others enjoy the same protections and are able to make money. Scientology uses its hate websites to attack Psychiatry, SP’s, 1.1’s, the media, and a litany of other people and groups it hates and yet it hypocritically demands that it not be exposed for what it is by the media. The Scientology Cult can dish it out but can’t take it.

While STAND certainly has every right to name and shame and to boycott those companies that advertise on Leah’s show, STAND is nevertheless missing the point. Scientology leader David Miscavige poured somewhere around $100 million dollars of Scientologists’ donations into Scientology Media Productions and yet SMP has not broadcast a single television program since its grand opening on May 28, 2016.

Why isn’t SMP broadcasting STAND’s message across the world of cable television? Why isn’t Scientology buying time on television networks with its enormous wealth to get out STAND’s message? Why is STAND reduced to a mediocre website and a Twitter campaign? Sounds like David “McScrooge” Miscavige is too tightfisted to really care.

SMP is a world-class studio that apparently does nothing. Rather, we see STAND impotently flailing away on Twitter where it is literally tilting against windmills and a cartoon lizard:

L. Ron Hubbard placed a high personal value on creation and the value of artists. Scientology Media Productions has Hollywood-level professional production capabilities. Scientology has television and movie stars as members. Despite these assets, STAND’s solution is to name and shame Geico and other companies while SMP remains silent and empty. This is failure writ large in the Scientology universe.

Scientology Media Productions empty studios mirrors Scientology’s empty Ideal Orgs

Ray Jeffrey Files Petition to Depose Mark & Monique Rathbun on their Finances

July 24, 2017: As reported today by Tony Ortega, attorney Ray Jeffrey has filed a petition with the District Court of Bexar County, Texas to examine the financial records Mark & Monique Rathbun. This is a matter arising from Monique Rathbun’s sudden and unexpected firing of her legal team and dropping her legal case against David Miscavige et. al.

The poster TX Lawyer commented on the Underground Bunker today:

Just to put this in context, this is what’s known in Texas civil litigation as a Rule 202 petition, which allows a potential plaintiff to obtain a court order to take a deposition even where a lawsuit is not pending, so long as you are doing it to investigate a potential claim or suit (or to preserve the witness’s testimony for use in an anticipated suit). They’re a pretty common procedure here in Texas, and most judges routinely grant them when requested. I do note that those document requests are awfully broad, so I would not be surprised if the judge pares them back if the Rathbuns object.

Tony is right that the Bexar County courts use a rotating docket for motions hearings, so you rarely know who’s going to decide your motion before you show up for the 9 am cattle call. And the 15 days referenced in the motion is the minimum amount of notice you have to give to the prospective witness, after the petition has been served on them, before the hearing can be held. It’s unclear whether the Rathbuns have been served yet, but you would ordinarily expect service to have happened by now. So whoever’s watching the docket sheet should look out for return of service and any notice of hearing.

As a practical matter, no halfway competent attorney would ever sue a client on an unpaid contingency fee unless they had a pretty good idea that some kind of payment or exchange was made. If the Church did make any kind of payment to Marty, either as a settlement or for his recent propaganda services, it’s going to be found pretty readily.

And here’s something to keep an eye on: If and when the Rathbuns respond to the 202 petition, who is their lawyer going to be?

Related documents:

1. Document posted by Tony Ortega:


2. Copy of online documents from the Bexar County Court portal: