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The tax status of the Church of Scientology in the United States has been the subject of decades of controversy and litigation. Although the Church of Scientology was initially partially exempted by the Internal Revenue Service (IRS) from paying federal income tax, its two principal entities in the United States lost this exemption in 1957 and 1968.
The Church of Scientology's interest is to be recognized as a religion as well as a charitable organization. Max Halupka observes "While a tax-exempt status is not a legal declaration of religious authenticity, the significance afforded the status by the public serves to color its true purpose.
After being recognized as a tax-exempt religious organization in 1957, Scientology's tax-exempt status was lost in a 1967 IRS audit. [5] As part of the effort to regain tax exemption during the late 1970s, Scientologists repeatedly infiltrated the IRS, copying large numbers of documents and at one point placing an electronic bugging device in an IRS conference room. [5]
Scientology's designation as a tax-exempt religion has given it protections during FBI investigations and in court cases. In 2009, the FBI investigated Scientology on claims of human-trafficking ...
From the time its tax exemption was removed by the IRS in 1967 to the reinstatement of the tax exemption in 1993, Scientologists filed approximately 2,500 lawsuits against the IRS. Over fifty lawsuits were still active against the IRS in 1993, although these were settled after the church negotiated a tax exemption with the government. [47] [48]
This exemption, however, is related to a German-American double-taxation agreement, and is unrelated to tax-exemption in the context of charities law. Unlike many well-established religious organizations, Scientology maintains strict control over its names, symbols, religious works and other writings.
But not everyone can qualify for tax-exempt income, and organizations that want tax-exempt status must follow a strict set of rules to qualify. Information is accurate as of Jan. 1, 2025.
In 1967, the IRS removed Scientology's tax-exempt status, asserting that its activities were commercial and operated for the benefit of Hubbard, rather than for charitable or religious purposes. [36] [409] In the mid-sixties, the Church of Scientology was banned in several Australian states, starting with Victoria in 1965. [190]