The Scientology Money Project

The US Government Seeks to Collect $3.5 Million in Back Taxes From Scientologists Matt and Kathy Feshbach

Matt and Kathy Feshbach at Scientology's Flag Building in Clearwater

Matt and Kathy Feshbach at Scientology’s Flag Building in Clearwater

Scientologists Matt and Kathy Feshbach owe the US Government $3.5 million in back taxes. As we reported in 2017, the US Bankruptcy Court refused to allow the Fessbach’s to discharge this multi-million dollar tax debt in their Chapter 7 bankruptcy.

In October 2017, US Bankruptcy Judge Catherine McEwen cited the Feshbach’s refusal to curb their lavish spending and large donations to their church (Scientology) as among the reasons for refusing to discharge their substantial tax debt via bankruptcy:

Between the first quarter of 2001 and the first quarter of 2010, excluding all tax payments (for 1999, 2001, and all other tax years), the Feshbach’s spent more than $8.5 million on personal and household expenses and charitable contributions. Of that $8.5 million, between the first quarter of 2003 and the first quarter of 2010, they spent, for example, $721,809.60 on personal travel, $503,607.83 on clothing, $370,856.24 on groceries, and $147,226.87 on entertainment. The total grocery bill does not include the $78,429.26 spent on dining out.

Nor does the nearly three-quarters of a million dollars spent on personal travel include the amount spent on a rented house in Aspen, which spending totaled more than $233,000.00.63 Some of the other extravagances included a private education for their son—a cost which may or may not be lumped in with the $360,731.00 that the Feshbachs spent on their children—and a personal chef. “She cooked for us, she took care of our son, she . . . cleaned the house, et cetera,” Mr. Feshbach explained. But personal chefs don’t come cheap. The Feshbachs paid more than $610,000.00 over eight years for their hired help…

Similarly, how does any portion of the Feshbachs’ half-million dollars-plus in charitable contributions aid them to repay their tax debt? If there’s an explanation, it wasn’t offered at trial. As a rule, it’s hard to imagine how giving money away would bolster an individual’s future income potential. And this case is no exception to that rule. The overwhelming majority of the Feshbachs’ charitable giving benefited a church that happened to be one to which Mrs. Feshbach’s personal interests were directly tied. In fact, Mrs. Feshbach owned and operated her own mission, with the main purpose of “introduc[ing] people to what [her church’s religion] is.” Thus, it’s quite clear that there was no link at all between the hundreds of thousands of dollars that the Feshbachs donated to the church and Mr. Feshbach’s earnings, but rather, there was a direct link between the charitable spending and Mrs. Feshbach’s religious pursuits. The Court does not admonish the Feshbachs (or any other debtors) for supporting worthy charitable causes. However, “[i]f individuals choose to donate part of their income to charity, whether religious or secular, they must adjust their expenditures accordingly to live within the confines of their available income.”

The US Government complaint against the Feshbach’s. Note: Please hover your cursor over the bottom of the page frame to invoke the page up/page down controls:

Feshbach.2019.US.Govt.Collecion

 

Judge McEwen’s 2017 ruling against Matt and Kathy Fessbach. Again, please hover your cursor over the bottom of the page frame to invoke the page up/page down controls:

US-v-Feshbach-Memo-on-Dischargeability

 

The Bankruptcy Court’s ruling stands in stark contrast to the Feshbach’s 2011 declaration in which they represented themselves as veritable paupers:

Feshbach-Declaration.2011

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