Scientology Critical Information Directory

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Deana Holmes


The Controversy over A Piece of Blue Sky by Jon Atack

«During the weekend of May 15-16, 1999, and at the beginning of the next week, the controversy seemed to gain critical mass. Various netizens began emailing reporters and connections with the news that, which was already under a lot of scrutiny for being a high-flying Internet IPO that had yet to turn a profit, was banning books for no good reason. Certainly the emails that customer service flaks were churning out were less than helpful. Words like "legal issues" and, later, "libel issues" were being thrown around by representatives who responded to netizen concerns via email. It was very apparent from the different messages being sent out that really didn't know what to say when contacted by netizens.»

Deana's Co$-IRS Agreement Analysis

«Since I've got to read this entire thing anyway, I thought I'd do an online analysis of what I read as I'm doing it. I should note that I am not a tax attorney, and so I'm looking for more mundane things to reach out and bite me. So this analysis is cursory, and I look forward to clarifications and explanations from professionals.»

Unanswered questions about the agreement

The following are some questions that I've come up with about the IRS/Co$ tax decision. Granted, some of these questions are fantasy questions, likely never to be answered because of IRS confidentiality and suchlike. Please feel free to add your own questions as well.
  • How much did IRS originally estimate was the Co$ tax liability?
  • Where did the $12.5 mil figure come from?
  • How many lawsuits had been filed against IRS (this is in the missing exhibits to the agreement)?
  • How frequent is the use of a 906 agreement (which settles *everything*)? It's believed that this is very infrequently used.
  • Has IRS made any moves to extend the extraordinary tax provision it granted to Co$ for "fixed donations" to other groups? Are there any internal IRS documents discussing this? (I'd like to see this because an estimate of the tax hit if they let this donation get out would be enormous, I do believe.)
  • Has the Church Tax Compliance Committee paid any fines in violation of this agreement? If so, how much were the fines, why were they levied and who paid them?
  • Are there any figures out there as to how much money individual Scientologists, as a group, were able to deduct from their taxes as a result of this exemption?
  • Was there any internal discussion at IRS about the possibility that the deduction granted only to Co$ could be a violation of the First Amendment Establishment Clause? If so, can we get those discussions?
  • Have there been any meetings of the CTCC and the IRS since the inception of this agreement? If so, where are the records and who were the participants and what was discussed?
  • What was the mechanism by which IRS notified Co$ of any lawsuits regarding this agreement? Did IRS notify Co$ of any FOIA requests as well? If so, what did they tell Co$?
  • What is in the separate "Settlement Agreement"?
  • Who were the five signatories for the church organizations on the last page of the agreement?
  • What is the implications for other religions that charge fixed fees for donations?
  • Did the Co$ dissolve WISE? If not, why not? (It's my belief that they probably dissolved WISE and reincorporated it, but the incorporation documents would state it.) Or, as it was suggested to me, it could indicate a later adjustment to the agreement...
  • Have there been adjustments to this closing agreement?

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