PREFACE This is one of a series of five (5) public-domain investigative reports on ties between the United States government and Scientology.

In the last report, issued recently, the investigation finally uncovered what lay behind the heavy IRS involvement that is documented in the first four reports in the series.

The first of these reports appeared in late 1997, exposing formerly-hidden connections between the IRS and Scientology's top corporation, the Church of Spiritual Technology (CST).

Only about a month later, the then-secret "Closing Agreement"

between the IRS and Scientology was "coincidentally" leaked to the Wall Street Journal. It has since been learned that the Wall Street Journal had at least the first two of these investigative reports in their possession at the time, and that WSJ journalist Elizabeth MacDonald had--according to her--written a story based on the facts in the reports, but that her story had been quashed in editorial.

Since these investigative reports first started appearing, extreme efforts have been made to discredit the reports, but have never once disproved, disclaimed, or even addressed a single material fact contained in any of the reports.

Some of these investigative reports, plus copious documentation supporting the facts in them, were hand-delivered to the office of William V. Roth, Jr., head of the Joint Committee on Taxation, around January or February of 1998. The reports and supporting evidence were reportedly delivered into the hands of Roth's chief assistant, Bill Nixon, who expressed grave concern over them. But nothing was done.

Because of the seriousness of the facts contained in these reports, and because of the efforts to suppress this information, I decided that these investigative reports were probably of sufficient import to collect them all up from various sources and republish them on relevant newsgroups. I did that in 1999.

Now even those reposts have disappeared from the usenet archives that are available on the web. And so I am reposting these again so they will be in the existing available archives.

This fourth report, "MORE IRS/SCIENTOLOGY SECRETS REVEALED:

TAX COMPLIANCE SECTIONS FROM: THE 'TAX COMPLIANCE MANUAL' (SECOND IN A SERIES)" proves that "Tax Compliance Sections" have been established inside church organizations, with church ministers being used as "Tax Compliance Officers" to enforce IRS codes and regulations, even against parishioners:

* * * * * * * * * * * * * Public Research Foundation
FOR IMMEDIATE RELEASE
MORE IRS/SCIENTOLOGY SECRETS REVEALED:
TAX COMPLIANCE SECTIONS FROM: THE "TAX COMPLIANCE MANUAL"
(SECOND IN A SERIES) Public Research Foundation (PRF) has recently disclosed that Scientology organizations are being governed in accordance with a closely-guarded "Tax Compliance Manual" (PRF PRESS RELEASE, "THE 'TAX COMPLIANCE MANUAL'--FIRST IN A SERIES").

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 reveals that IRS has been a knowing party to the establishment of "Tax Compliance Sections" to govern every Scientology church and mission, bringing about an unprecedented closure between church and state.

The Tax Compliance Manual says:

"FORMATION OF THE TAX COMPLIANCE SECTION "The Tax Compliance Section has been formed in the Corporate and Legal Rudiments Branch of Office of Special Affairs International. It is staffed with veteran OSA INT crew who are extremely knowledgeable and experienced in tax and finance matters. There will also be a Tax Compliance Officer in each Continental OSA Office. A primary function of the Tax Compliance Section is to ensure that all churches and missions comply with all requirements of tax exemption."

The Closing Agreement verifies that IRS is a party in informed consent to the creation and operation of these "Tax Compliance Sections" inside the church. The Closing Agreement requires annual reports be submitted to IRS, and part of the requirements include:

"6. Reporting of any ecclesiastical modification or the restructuring of any entity. The Annual Report shall include any changes...to the ecclesiastical management structure of the Church..."

and

"9. Reporting of any amendment of any directive concerning the treatment of funds. The Annual Report shall disclose the issuance, modification, amendment, or rescission of any written material relating to or involving the handling of funds by Church personnel."

The "Tax Compliance Manual" treats extensively of the handling of funds by Church personnel, and constitutes a definitive modification and restructuring of CSI to include the organizational "Tax Compliance Sections" within OSA International.

If IRS had not been informed of the Tax Compliance Manual and of the addition of the Tax Compliance Sections inside churches of Scientology, then the Church Tax Compliance Committee signatories would have been in violation of terms of the Closing Agreement, and therefore liable to extreme penalties outlined in the agreement.

But the Tax Compliance Manual also says:

"The Tax Compliance Section is concerned with the activities of church organizations throughout the world-- not just those located in the United States. Recognition of tax exemption by the IRS opens the door for similar recognition of local orgs and missions by tax authorities in many other countries."

Having already established that "There will also be a Tax Compliance Officer in each Continental OSA Office," this means that these extensions of IRS, there specifically and only to enforce compliance to IRS codes, are now situated on foreign soil, but camouflaged by their existence inside the churches.

The IRS's new power over the church's activities is perhaps best summed up in one chilling sentence from the Tax Compliance Manual:

"Any question as to whether a post qualifies as a ministerial capacity should be referred to the Tax Compliance Officer, Office of Special Affairs International."

In the next part of our series, PRF will explore the relationships and power of the church's corporate officials.

-END OF RELEASE-

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