IRS and Scientology
Public Research Foundation Reports

MORE IRS/SCIENTOLOGY SECRETS REVEALED:

THE "TAX COMPLIANCE MANUAL"

Part One

Public Research Foundation
PUBLIC RESEARCH FOUNDATION
HCR 38, BOX 66
LAS VEGAS, NEVADA 89124
PHONE: 702-873-2343
FAX: 702-873-2115
E-MAIL: prf@mailcity.com
FOR IMMEDIATE RELEASE

November 1997

More revelations are coming to light surrounding the formerly secret Closing Agreement between IRS and the current leaders of Scientology. Public Research Foundation (PRF) has recently discovered that Scientology organizations are being governed in accordance with a closely-guarded "Tax Compliance Manual." That manual reveals previously unknown information about the new power structure of the organizations.

The manual was created in 1993, the same year that the Closing Agreement was secretly signed by IRS and church officials. The Tax Compliance Manual is published by sanction of the Church of Spiritual Technology (CST)--the senior corporation which owns all the copyrights.

The manual is significant in many respects, not the least of which is a sweeping relocation of power that was once vested in Scientology's "Sea Organization" (Sea Org).

The Sea Org was originally set up by Scientology founder L. Ron Hubbard to exercise supreme and absolute authority over all of Scientology. But buried in the language of the Tax Compliance Manual is clear evidence that the new corporations are in control now, that Sea Org members are merely employees of the corporations, and that Sea Org members can be summarily dismissed at the sole discretion of the Directors of the corporations.

Although this massive shift of power has been in effect since at least 1993, it apparently has been fully known only by the architects of the corporations, and by the principals in the once-secret IRS/Scientology closing agreement.

So suppressed was the information that Los Angeles Superior Court judge John P. Shook, as recently as October 29, 1997, in "Wollersheim v. Church of Scientology of California," was led to rule:

"'Sea Org' is the unincorporated association which is the power center--(David) Miscavige is its highest ranking member."

It is likely that if church officials had disclosed the content of their Tax Compliance Manual, such a ruling would have been all but impossible: although Miscavige, Chairman of the IRS-spawned "Church Tax Compliance Committee," may arguably be the highest ranking member of the Sea Org, a careful reading of the Tax Compliance Manual strongly suggests that the position, legally, is meaningless, and that the Sea Org has been effectively negated as any kind of "power center." The manual first establishes that:

"All individuals in the Sea Organization are employees of the local organization (corporation) in which they work. The Sea Org is a religious order within the ecclesiastical structure of Scientology but is not an incorporated organization itself and has no staff or employees. The Sea Org contract is binding ecclesiastically but is not an employment contract. All Sea Org members sign standard employment contracts with the corporation at which they are currently working. If they are transferred to another organization, they will sign a new employment contract with that corporation for their period of employment."

Having established that the Sea Org is a religious order only, and that the "Sea Org Contract" is not binding legally (only 'ecclesiastically'), the manual then provides corporate Bylaws, part of which state:

"Section 3. Religious Orders. The Church may establish and maintain religious orders, the purposes of which shall be the carrying out of the religious and administrative activities of this Church AND CORPORATION." (Emphasis added.)

Then the Tax Compliance Manual spells out where the final power and authority over the Sea Org lies:

"Section 6. Discretion of Directors.... (M)embership in a Religious Order, ordination, or affiliation may be denied or revoked for cause deemed to be sufficient by the Directors in their sole discretion."

Given that corporate Directors (which would include "special dirctors," as they are not excluded in the wording) can terminate Sea Org membership at any time "in their sole discretion," and given that the only legally binding contract Sea Org members have is the employment contract with the corporation where they work, then the Sea Org--apart from its function as a religious fellowship--could be considered as little more than customery for corporate employees. According to the Tax Compliance Manual, the power lies with corporate Directors.

A recent PRF investigation disclosed that there are special Directors in the powerful ruling corporation--Church of Spiritual Technology--who are not even adherents of Scientology, much less members of the Sea Org.

The Tax Compliance Manual will be explored more fully in this series. One issue is the apparent subjugation of church doctrine and scripture to conformity with IRS regulations, particularly those found at 501(c)(3). The manual bears evidence that at least some of Hubbard's writings--identified as scripture--have been altered to ensure that the religion is in compliance with IRS codes.

PRF's series will also address the creation and establishment of "Tax Compliance Sections" in Scientology organizations.

Another revelation from the Tax Compliance Manual that will be covered in this series is the critical role of the corporate Trustees, who hold power over the election of the Board of Directors in each corporation.

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