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The case for Inurement

Discussion in 'Leaks & Legal' started by tikk, Feb 14, 2011.

  1. grebe Member

    I suspect that we would need a witness to tell us whether the work done on Mr. Cruise's vehicles was part of someone's personal hobby verses a misuse of materials and labor at the Church's discretion.

    Oh wait we gots a witness. Yay!

    BTW nothing better happen to our witness, Mr. Badguys.
    Raping a charity's savings account for luxury items and services would seem to violate the principle of "fiduciary duty."

    But perhaps Scientology is not actually a charity with a duty to use its resources wisely in service to the greater community?
  2. Anonymous Member

    Its not just the labor--though a good case can be made for the labor because JB & others were not doing this during "spare, rather these activities were a full time job while he was collecting his measily $50 a week salary--but also the materials and Co$ resources and materials.
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  3. Mark Cabian Member

    I think if that were the view, that the CoB would be not just lavishing expensive gifts on a client, but showing either personal favoritism, or possibly bribes to continue the strong relationship. Most of all, it is demonstrating that he is overflowing with "religious donations".
  4. Orson Member

    Thank you. An email inviting him to join this thread and possibly consider another piece for HuffPo has been sent. I made it clear we have no expectations but would appreciate his looking at the issue and considering it for publication.

    sorry, i know it's annoying to some, but on this one, i can't resist: oh hai, osa. fucktards.
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  5. Cudgel Member


    What's to defend? It has always amazed me that they did not just submit the high court decision to every judge hearing one of the scilons bullshit lawsuits along with a request for dismissal (there were mimeograph* machines back then)/ Instead they tried to fight them individually.

    *I'm old. Google is your friend.
  6. tikk Member

    The argument that a SO worker would provide, on his/her own free time and impetus and free of charge, the type of services Brousseau provided to the highest level official in that worker's religious organization, and that official's celebrity friend, is one I doubt even Scientology would bother to make. Even if they managed to somehow internally rationalize the argument it so that they themselves believed it to be true, they'd still have the wherewithal to realize that no one else would.

    Inurement is an IRS issue, and has nothing to do with human trafficking.

    An exempt organization can legitimately justify (to the IRS anyway) a great many luxuries and perks, especially those relating to travel, because those sorts of things naturally occur in the course of conducting religious business, which can be a pretty broad and amorphous concept. A chief reason why Brousseau's allegations are so compelling is that the nature of the services he provided--customizing luxury vehicles belonging to individual officials and members of the organization--cannot be rationalized as having a religious purpose in even the most imaginative sense.
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  7. adhocrat Member

    That makes it that much more fascinating to see what sort of spin CoS puts on this.
  8. CarltonBANKS Member

    The new yOrker is a real magazine, not just a wrbsite? Are they on sale anywhere in London? Fucking twenty six pagez?
    Is tar new yOrker well respected?
  9. HellRazor Member

    Yes.
  10. Anonymous Member

    Yes to all of the above

    http://en.wikipedia.org/wiki/The_New_Yorker
  11. Anonymous Member

    Yeah but what incentive can be given to the IRS to spend the millions to challenge this? What can be done to convince them not to be scared of the next 7000 lawsuits awaiting them if they want to make any changes? Scientology is good at making things expensive, and the IRS is no exception to the rule.
  12. Anonymous Member

    One would think that laws enforced would prevail.
  13. CarltonBANKS Member

    So this is getting lots of eyeballs? Hahahahahahahahahahahahahahahahaha. I mIght be q bit high right now ;)


    SO, THE BiG QuESTION is : what are chances of a Frredom magazine attack on Author, in similar fashion to SP Times reporters?
  14. Anonymous Member

    After more than 10 years Scientology enjoying its special tax exemption, I'm not seeing even a vague shadow of a cousin resembling enforcing the law in all this. Scientology's Tax Exemption is unconstitutional and institutionalized discrimination against other religious organizations, isn't it? I'll re-frame my inquiry. If the law is supposed to do something about it, why hasn't it cracked down on the tax exemption years ago? What has kept the law from intervening?
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  15. andonanon Member

    Thank you for the post, tikk.

    In order for the inurement issue to stick regarding Tom Cruise, he would have to be considered an "insider", and that might be a tricky issue since he is not part of church management. I think it might be possible to make that case, but it is not a slam-dunk.

    As far as Miscavige goes, a big issue is whether the benefits that he receives are reported by him as income on his personal taxes. Without access to his personal tax return or church financial records, it is impossible to know that. If he reports them on his personal return, and can provide proof they were approved by church management (ie some kind of oversight board, which I am sure he will have no trouble providing), it probably is not inurement.

    In any event, excess benefit transactions will just have negative tax effects on the recipients and the officials who approve them and are unlikely to have a major adverse effect to the organization as a whole, as far as the IRS is concerned. Once given, the IRS is unlikely to revoke tax exempt status based on inappropriate transactions alone. I think there would be materiality considerations as well and the proportion of the value of the benefits to Miscavige compared to the finances of the organization as a whole could be a consideration. According to some tax articles I have read, for the last several years the IRS has preferred a policy is trying to enforce tax compliance regarding inappropriate transactions without resorting to revocation.

    I think Example 3 and Example 4 in this book excerpt are illustrative. (see bottom of page 41)

    http://books.google.com/books?id=jdC0W4EzhgcC&pg=PA39&lpg=PA39&dq=inurement 2006&source=bl&ots=4njw_kOHdd&sig=e5VdYmjrOBL8kgIQr9qi8Domcfw&hl=es&ei=-Q9aTbvlOMH88AbQ9qCkDg&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBkQ6AEwAA#v=onepage&q&f=false

    In my opinion, the prima facie case won't be sufficient to have any effect on COS tax exempt status. The most that could be hoped for would be to get DM in tax trouble as an individual (a worthy goal, to be sure).
  16. i'mglib Member

    I wonder if this "whistleblower" form could be sent to the IRS, with Miscavige's name as the taxpayer, and the John Brusseau document attached.

    http://www.irs.gov/pub/irs-pdf/f211.pdf

    That way we could get part of the recovered taxes as a reward. :)
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  17. Anonymous Member

    Pardon my devil's advocate, but let me put this another way, before I totally jump on this bandwagon. This personal "tank" had something for a religious purif for Katie Holmes built into it. Could that be for a religious purpose ? The armor for the vehicle could be used to house secret documents for OT levels etc for the paranoid practitioner, it is not uncommon for these levels to be housed in a safe or locked in a closet, handcuffed to the wrist etc while learning about the alien ghosts that attach themselves to our bodies that create all the troubles in the universe.

    If Tom Cruise was a devote Catholic like Mel Gibson and wanted to give his wife a gift of a gold chain Rosary made with diamonds and rubies, would it be improper for the Pope or a Bishop to have a nun or monk who showed skills in crafting Rosaries create one for a gift ? The materials then could be sold to Tom or Mel for cost with out any compensation to the nun who toiled making it, or am I wrong ?

    In my research of human trafficking I did find that it was improper or at least questionable if you "hired out" your "slave" to do the services for your rich friends. I think I remember one ex SO member on YT that said he was sent to polish silverware for some well respected public scientologist. Wouldn't that be an issue as well in the case of building an airplane hanger , or what ever was done on TC's property ?
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  18. grebe Member

    If you bring gum to class you have to share it with everyone. Same with charities. They can't bogart the good stuff for just a couple of the higher ups.
  19. tikk Member

    An "insider" for the purpose of non-profit law is not necessarily management, it's rather an individual who exerts influence over the organization. There are numerous corroborating stories regarding the influence Cruise has over Scientology, which treats Cruise like royalty (see, e.g., how the Cruise-Kidman wedding was conducted). To the extent that it's possible to argue that Cruise, who holds no official title, does not wield influence and is thus not an insider beneficiary, the argument doesn't evaporate but rather shifts to Miscavige, who, as having directed the benefit, is then deemed the insider beneficiary on behalf of his friend Tom Cruise. An improper benefit can't be defrayed by designating it as belonging to a non-insider when the benefit is bestowed at the behest of a 'de facto' insider.

    As for whether Miscavige declared on his taxes the type of benefits discussed by Brousseau et al,. I think the answer to that is self-evident by Scientology's official response. If Miscavige declared Brousseau's services on his taxes, there would be no need to vehemently deny Brousseau's allegation because the transaction would have been legit. The IRS presumably already has Miscavige's personal taxes, which we'll likely never see. The investigation, should one be initiated, would be in their hands anyway. The picture that has emerged of Miscavige over the past decade is of a hubristic, power-loving tyrant who treats his staff like slaves, and who personally benefits from their servitude on a daily basis. If the foregoing is true, and I believe it is to varying degrees, it seems unlikely that this same person is simultaneously calculating those personal benefits to keep himself square with the IRS (who he already knows wants no piece of Scientology). And especially because a person in Miscavige's position would explicitly want to hide those types of transactions from the IRS due to the fact that they would serve as evidence that a worker like Brousseau was not serving in a ministerial capacity.

    As for your comment that the IRS is unlikely to revoke, I agree, but only because I'm a legal realist and take into account the political realities, which do more to steer the law than do law books. The types of benefits provided by Brousseau are ordinarily viewed by the IRS as inurement, and there is no such thing as de minimis (nominally permitted) inurement. The Brousseau transaction alone could jeopardize Scientology's exempt status. But remember too that the Brousseau allegation represents a single piece of corroborating evidence constituting a pattern of conduct. If the IRS cares to interview others such as the Headleys, they'll find more pieces. But I doubt they want to.
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  20. Anonymous Member

    Scientology will offer "back pay" to Brousseau, and the issue will go away. Isn't?
  21. Anonymous Member

    It is a well respected and established publication with an impeccable track record. Not only that, but their fact checking dept is unparalleled in the business. For this story alone they fact checked over 900 items.
    An article published in the New Yorker is damn near bullet proof.
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  22. tikk Member

    Inurement is an issue between Scientology and the IRS and only incidentally involves Brousseau. Making Brousseau "whole" by properly compensating him does not erase the issue, no, though the IRS may also direct that.
  23. Anonymous Member

    Stop being so glib. :-P I think, like so many other threads and discussions on this topic, it will ultimately go nowhere for the reasons others ITT have mentioned. If the CoS is going to take a financial hit, it will take time. If there's one thing the last three years have taught us, it's that we are more powerful than the government when it comes to peacefully dismantling the cult, and our methodology can topple regimes. On that second note, good evening Egypt and Tunisia. I hope Algeria, Iran, Bahrain, Libya, and Morocco join the party soon.
  24. BigBeard Member

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  25. AnonLover Member

    IRS is FAIL. But Grassley's recent public spectacle investigation and religious-right cawk sucking enabler report perhaps open a door by mentioning the cult's IRS deal in passing, but not stating an actionable effort to do anything about it, that us lazy faggots are possibly missing here.

    I reiterate my call for issueing an open letter challenge from chanology anon to Grassley politely calling him out on his pass the buck shenanigans after his so-called investigation, and do it press release style. i totally suck at letter writing so telling me just do eet aint gonna cut it, but offer my copy editing dox-meister sword if somebody gets a draft going in the related think tank thread here:

    http://forums.whyweprotest.net/thre...vestigation-into-tax-exempt-ministries.67465/
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  26. Nancy Beazley Member

    Politics. All is politics. And publicity. Which is politics.
    • Like Like x 1
  27. andonanon Member

    Your point about Brousseau's services proved being undeclared because they were so vigorously denied is pretty persuasive. I also had in mind when I wrote my post other, more tangible benefits DM has been claimed to have received, mostly vehicles.

    I wasn't claiming there was such a thing as "de minimus" inurement, I was referring to materiality as it regards the determination of "reasonableness" of compensation, if DM had been reporting certain benefits as income.
    EDIT: The other way in which materiality could become an issue is the punishment that the IRS might choose to impose in cases of inurement. Usually, the response is excise taxes on individuals involved with no sanctions on the organization. But in cases of material, egregious, systematic violations, they might be more likely to consider revocation of tax-exempt status.
  28. Anonymous Member

    Mass clone Senator Xenophon and elect them to the US senate and house of reps.
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  29. Anonymous Member

    Any Sarbanes-Oxley implications here for any of the CoS corps?
  30. Anonymous Member

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  31. Anonymous Member

    Fact of the matter is, IRS will not change a thing until it is given an incentive. Heck its more likely to go into the court room kicking and screaming if the law actually does act (which I doubt).

    The way I see it, the only way it can be challenged is through Congress. Convince Congress that A) Scientology's tax exemption is a constitutional violation, B) Its discriminatory against other religious institutions, and C) that Scientology's tax exemption was illegitimately gained, and D) the organization can be penalized through back-taxes (we're talking millions that the government would love to add to its bank account), then maybe they will challenge it.

    But forget lobbying as Anonymous, those guys wouldn't touch us with a 10 foot pole now. You'd have a better chance convincing other religious institutions to make a big stink about it. Catholics? Protestants? Jews? Muslims? Hindus? Sikhs? Would these folks dislike being treated unfairly? Would they have the lobbying power to go to Congress?
  32. tikk Member

    While I agree with this, the IRS is not only a single entity, but a collection of individuals. I recall reading statements in this past from unnamed IRS officials who admit to embarrassment with regard to the whole "Scientology thing." Recall too that the secret agreement was leaked to the Wall Street Journal, almost definitely by an IRS official. I'm sure there are numerous IRS officials who remain embarrassed by their caving in to Scientology, and are angry at seeing Scientology flaunt their exempt status by operating as they do. So yes, I'm cynical about the possibilities myself, but this is as good a time as any to push them.
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  33. Ron B DED Member

    See this old thread for scans of the Scientology Sec Check ("confessional") specifically for IRS Employees / IRS ex employees / IRS employee family members.

    http://forums.whyweprotest.net/threads/scientologys-irs-employee-sec-check.66234/

    I bet the current crop of IRS employees are not aware of this.
  34. exOT8Michael Member

    Only half of the "secret agreement" was leaked. Another 62 pages, or so, were sealed. I would LOVE to read those! Doc = TIGTA 9-9801-0002, an internal IRS dox.

    Question: when a tax exempt status organization is set up by directly by IRS permission who owns the organization, the IRS?
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  35. Anonymous Member

    tikk, you are doing some really nice work.
    thanks.
    • Like Like x 1
  36. exOT8Michael Member

  37. mnql1 Member

    From the Feb. 15, 2011 meeting of the Riverside County Board of Supervisors:
    Scientology: Feb. 15, 2011 Tom Cruise, David Miscavige, and Private Inurement
  38. Anonymous Member

    do they have to sit there and let orange ramble on? If it was me i would kick his ass out...make a point!
  39. Orson Member

    FYI, my email to him was caught up in his spam filter and sent me an email back asking me to click a link to confirm I'm a real person, so I did. But that did not happen until just now. The filter says my email(s) will now be delivered. FYI, timing update.
    • Like Like x 1
  40. anonhuff Member

    I searched the thread for this link, did not see it posted so here is a short summary for you or anyone else that has not read it/the whole new yorker article,
    here: http://www.tnr.com/blog/jonathan-chait/83463/and-now-word-the-legal-department-the-new-yorker

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