Scientologist Tax Trial to Open Today

Scientologist Tax Trial to Open Today Fair Game

http://www.nysun.com/article/4402

November 8, 2004 Edition > Section: National

Scientologist Tax Trial to Open Today BY JOSH GERSTEIN - Staff Reporter of the Sun November 8, 2004

SAN FRANCISCO - A California accountant who sends his children to Orthodox Jewish schools is to appear in federal court this morning to attempt to force the Internal Revenue Service to grant him the same tax deduction for religious instruction that it accords to members of the Church of Scientology.

The trial, which is scheduled to open today in Tax Court in Los Angeles, is the second round in Michael Sklar's long running legal battle with the IRS over his claim that part of the tuition he pays for his children at Jewish day schools should be tax deductible.

"I've been hanging on for a decade because I feel it's imperative that this case be fought," Mr. Sklar said in an interview yesterday. "This kind of basically religious favoritism is very damaging, certainly for Jewish people, but probably for all people in the United States."

The case stems from an agreement the IRS reached in 1993 with the Church of Scientology, a religion founded in the early 1950s by a science-fiction writer, L. Ron Hubbard. The settlement ended what the Scientologists described as a "war" between the federal government and their church.

Under the pact, the IRS granted tax-exempt status to a variety of Scientology entities, while the church paid $12.5 million to the government and agreed to financial controls to ensure that its leaders were not unduly enriched by payments from Scientology followers.

What troubles Mr. Sklar is a part of the settlement that allows Scientology members to deduct from their taxes amounts they pay for religious training or "auditing," a practice in which Scientologists purge themselves of troublesome thoughts by holding a device that measures the body's electrical impulses.

The IRS and the church agreed to keep the details of their deal secret, but Mr. Sklar noticed in late 1993 that the tax agency suddenly withdrew, without explanation, a written ruling that had barred Scientologists from taking deductions for religious programs. Mr. Sklar viewed the government's decision as conferring a benefit on Scientologists that is not extended to members of other religions.

"I see no reason why we should be any different. It's not like they're any more religious than we are," said the 45-year-old accountant, who lives in Los Angeles with his wife and six children.

In early 1994, Mr. Sklar filed for tax deductions for 55% of his tuition payments for the preceding three years. He said 55% represented the amount of time his children spent in Jewish religious studies at their schools.

After the IRS disallowed his deduction, Mr. Sklar filed a case in Tax Court in 1997. Appearing without a lawyer, he argued that the Constitution requires the government to treat members of all religions equally. "You just can't do it for one group and not do it for another," he said.

The Tax Court rejected Mr. Sklar's arguments, and he appealed to the 9th Circuit Court of Appeals. A Washington-based lawyer, Jeffrey Zuckerman, who is also an Orthodox Jew, agreed to take the case on a pro bono basis.

In 2002, a three-judge panel of the 9th Circuit turned down Mr. Sklar's appeal. The court sharply criticized the IRS for its secrecy and suggested that the deduction for Scientologists was probably unconstitutional. However, the judges said the accountant had not shown that the religious instruction his children receive in school was sufficiently similar to the kinds of training courses that Scientologists are allowed to deduct.

"Why is Scientology training different from all other religious training?" Judge Barry Silverman wrote in a concurring opinion that evoked the history lesson that accompanies a traditional Jewish seder. "We should decline the invitation to answer that question. The sole issue before us is whether the Sklars' claimed deduction is valid, not whether members of the Church of Scientology have become the IRS's chosen people."

The judges also suggested that some facts in the case were murky. For instance, it was not clear whether Mr. Sklar had paid more in tuition than he would have if he sent his children to secular schools.

A lawyer for the Church of Scientology, Monique Yingling, denied that the 1993 agreement entitles the religion to special treatment.

"The IRS agreed to treat the Church of Scientology like all other religions are treated. The Church of Scientology does not get a deduction for parochial school education and that's what the Sklars are trying to get," she said in an interview Friday.

Beginning today, Mr. Sklar will get another shot at proving his case, as the Tax Court considers whether to uphold a $15,000 deduction for tuition that the accountant took on his 1995 return.

The IRS declined to discuss the dispute, citing taxpayer privacy laws, but Mr. Zuckerman said the agency has argued that the religious studies and secular classes at Jewish schools are so intertwined that it is impossible to determine what portion of the tuition goes toward religious education.

Mr. Zuckerman said that at least half the classes on any given day are religious. "There is truly strict separation. There's no overlap," he said.

While donations to charitable and religious organizations are tax deductible, tuition at religious schools generally is not. If the IRS considers a payment to be a quid pro quo, then a taxpayer can only deduct that portion of a donation that exceeds the value of the goods or services provided in return. However, the tax agency has allowed taxpayers who get intangible religious benefits from their gifts to deduct them in their entirety.

"If you're Jewish and you pay a synagogue so you can have a seat for High Holidays, it's technically a quid pro quo, but the IRS allows it to be deducted," Mr. Zuckerman said. He said Mormon tithes and Catholic pew rents are also fully deductible, even though the donors get some benefit from their gifts.

Mr. Zuckerman said that if his client prevails, purely religious programs for adults would also become deductible.

"Could Madonna deduct the cost of her Kabbalah class?" he asked. "Under our argument, the answer would be yes."

Jewish groups are divided about whether taxpayers should be able to deduct tuition at religious schools.

"We are certainly in favor of the deductibility of a portion of parochial school expenses and, if the court would go that way, we'd be very pleased," the director of public policy for the Orthodox Union, Nathan Diament, said. "People who use parochial schools are paying the same property taxes as everyone else that supports the public school system."

Mr. Diament said Mr. Sklar will be "the hero of many people if he's successful." However, Mr. Diament said the accountant's chances of prevailing are "rather slim."

An attorney with the American Jewish Congress, Marc Stern, said his group opposes such a deduction because of fears that it will drain revenue from public schools and because the benefits would accrue primarily to families with higher incomes. "It's not good public policy," he said.

Mr. Stern noted that Congress has considered and rejected proposals to create tax deductions for private and parochial school tuition. "It would be, I think, out of place for the court to create a social program the Congress hasn't mustered the political will to enact," he said.

For his part, Mr. Sklar said he bears no ill will toward the Scientologists. "The only anger I feel is toward the government," he said.

<hr> Subject: Scientology (Sklar) TAx case Report
From: idaj007@aol.com (IDA J 007)
Date: 09 Nov 2004 04:45:14 GMT

Scientology (Sklar) Tax Case Report

Notes on the Sklar v. IRS case (US Tax Court, Docket #395-01):

The IRS Counsel Louis Jack, is effectively limiting the case discussion to Michael & Marla Sklar's children's attendance in religious schools.

This is due to Judge John O. Colvin's concurrence with the Motion in Limine filed by the IRS, and refusal to consider or even explain his denials, to Petitioner Sklar's attorney Jeffrey Zuckerman. Zuckerman complained about "prejudice" in the Judge's decisions.

Included in the denials, were subopenaes for testimony by COS President Heber Jentsch on the nature of Scientology religious instruction (which were quashed), and avoidance of consideration of verifying the authenticity or accuracy of the IRS "Secret" 1993 agreement with Scientology (as written later in 1997 in the Wall Street Journal).

The IRS attorney's argument for rejecting testimony requests from Scientologists, was based on a claim that the "Secret Agreement" represented a "settlement" and that it would set poor precedent for future settlements with other entities, to release private financial data.

The IRS Attorney frequently interrupted witnesses for the Sklar's, questioning the admissability of their statements and evidence on procedural grounds. What was allowed, was frequently tedious detail of billing practices for Jewish religious grammar school instruction.

Interesting reveleations included:

The IRS in 1995, verbally indicated to Mr. Sklar that they have a internal division, devoted solely to handling "nothing but" claims for deductions by Scientologists!

The Judge, John O. Colvin, won't allow the public to see the actual case files during the hearings on the case! Trail Clerk Brian K. Woody was asked, but could not provide, filed documents in his possession.

Trial continues every weekday (excepting Veteran's Day) this week from 9AM to 5PM at 255 E. Temple Street (Room 1145, 11th Floor) in Downtown LA.

Associated Press on SKLAR NY Sun Article with links to IRS Secret Agreement

<hr> Subject: Re: Scientology (Sklar) TAx case Report
From: Tom Klemesrud <tomklem@netscape.delete.net>
Date: Mon, 08 Nov 2004 23:38:13 -0700

IDA J 007 wrote:

> Scientology (Sklar) Tax Case Report
>
> Notes on the Sklar v. IRS case (US Tax Court, Docket #395-01):
>
> The IRS Counsel Louis Jack, is effectively limiting the case discussion to
> Michael & Marla Sklar's children's attendance in religious schools.
>
> This is due to Judge John O. Colvin's concurrence with the Motion in Limine
> filed by the IRS, and refusal to consider or even explain his denials, to
> Petitioner Sklar's attorney Jeffrey Zuckerman. Zuckerman complained about
> "prejudice" in the Judge's decisions.
>
> Included in the denials, were subopenaes for testimony by COS President Heber
> Jentsch on the nature of Scientology religious instruction (which were
> quashed), and avoidance of consideration of verifying the authenticity or
> accuracy of the IRS "Secret" 1993 agreement with Scientology (as written later
> in 1997 in the Wall Street Journal).
>
> The IRS attorney's argument for rejecting testimony requests from
> Scientologists, was based on a claim that the "Secret Agreement" represented a
> "settlement" and that it would set poor precedent for future settlements with
> other entities, to release private financial data.
>
> The IRS Attorney frequently interrupted witnesses for the Sklar's, questioning
> the admissability of their statements and evidence on procedural grounds. What
> was allowed, was frequently tedious detail of billing practices for Jewish
> religious grammar school instruction.
>
> Interesting reveleations included:
>
> The IRS in 1995, verbally indicated to Mr. Sklar that they have a internal
> division, devoted solely to handling "nothing but" claims for deductions by
> Scientologists!
>
> The Judge, John O. Colvin, won't allow the public to see the actual case files
> during the hearings on the case! Trail Clerk Brian K. Woody was asked, but
> could not provide, filed documents in his possession.
>
> Trial continues every weekday (excepting Veteran's Day) this week from 9AM to
> 5PM at 255 E. Temple Street (Room 1145, 11th Floor) in Downtown LA.
>
> Associated Press on SKLAR
> NY Sun Article with links to IRS Secret Agreement

What this judge and the IRS counsel are going to get at, is that it is lawful for the government to discriminate against the jews, when a handful of IRS high officials, ignoring their own rules, and illegally instructing underlings to ignore IRS rules--as long as there is a secret backroom agreement involved, craftily drafted is such a way as to obscure such secret lawmaking from the scrutiny of the public and the courts.

I talked to IA Senator Charles Grassley, (Finance Committee overseeing IRS, and Judicial Committee overseeing the courts), and he said that this must ultimately be settled in court--not with legislation.

But then, that cannot happen with judges like Hon. John Colvin not even recognizing what the law of the land is.

Good luck. I think Sklar is a hero.

Tom Klemesrud

<hr> Subject: SKLAR - Jewish vs IRS Scientology - 1st Tax Case Documents HERE - Lermanet.com Exposing the CON
From: arnie lerma <alerma@bellatlantic.net>
Date: Tue, 09 Nov 2004 18:27:55 GMT

WEBBED HERE: http://www.lermanet.com/scientologylegal/sklar-case-motions.htm

Report from Trial at top of MAIN index page HERE http://www.lermanet.com/index.htm

Sklar Case Motions:

Note 1: Apologies for any typos; this was rushed.

Note 2: This document has been SUPPRESSED from the public, by the US Tax Court Judge John O. Colvin, who has refused public access to the Docket #395-01 file, for the duration of the Sklar v. IRS hearings, until he issues his written decision. It is reproduced here, as a public service, to coincide with anticipated public interest, from news coverage of this historic trial!

Note 3: To protest this described unconstitutional conduct by the IRS (while it it still relevant to current hearings), contact Mr. Jack's boss: Donald D. Korb, Chief Counsel, IRS

Note 4: To put appropriate pressure upon the IRS Counsel, it is suggested that readers contact ASAP by fax, offices of those Congressional Committee members (with budgetary oversight powers over the IRS), requesting IRS Counsel's release of IRS's 1993 Church of Scientology "Secret Agreement" Documents to the Court, with the goal of a more open and fair hearing.

Petitioner's Motion for Reconsideration of Three Orders: (filed November 4, 2004 in US Tax Court, Docket #395-01)

Petitioner: Michael & Maria Sklar Petitioner's Counsel: Jeffrey Zuckerman Respondent: Commissioner of Internal Revenue Respondent's Counsel: Louis B. Jack, Senior Counsel, IRS

Petitioners respectfully move the Court, pursuant to Tax Court Rule 50, to reconsider three orders:

1) The unwritten order granting without explanation the motion of third-parties the Church of Scientology International ("CofS"), and Reverend Heber C. Jentzch (the President of CofS) to quash trial subpoenas deuces tecum that petitioner's counsel served upon them (note 1);

(note 1: CofS and Rev. Jentzch moved to quash the subpoenas on March 12, 2004, and petitioners served their opposition to that motion on March 19th. The law clerk to Judge Colvin subsequently advised the attorney for petitioners, by telephone, that the Court had granted the motion to quash, and the Court referred to this during unrecorded conferences with the parties on March 24, 2004, but it appears that no written order was ever entered with respect to the third-parties motion to quash.)

2) The Order dated November 20, 2003, to the extent that it granted without explanation respondent's motion for a protective order with respect to petitioner's requestss for admissions, and provides that respondent need not answer petitioner's requests for admissions nos. 1 through 78; and

3) The Order dated July 28, 2003, to the extent that it granted without explanation respondent's motion for a protective order with respect to petitioner's interrogatories and document requests, and provides that respondent need not respond to petitioner's interrogatories nos. 1 through 31 and 35, and to petitioner's document requests nos. 1 through 20 and 25.

The crux of this motion is to determine whether petitioners will be permitted to prove one of their two principal arguments in this action: that IRS unconstitutionally discriminated against petitioners, in patent violation of the First Amendment, by permitting practitioners of another religion, Scientology, to deduct as charitable contributions their payments for religious education, but disallowing petitioners' deduction of their payments for religious education because they are Jews and not Scientologists.

Petitioners made essentially the same argument in litigation concerning their 1994 federal income tax return. (Sklar v. Commissioner, 79 T.C.M. (CCH) 1815 (2000), aff'd 282 F.3rd 610 (9th Cir. 2002). The Tax Court did not dispute petitioner's contention that IRS may not discriminate on the basis of a taxpayer's religion, but held that "petitioners have not established that they are similarly situated with the members of the Church of Scientology who make payments for auditing." The Ninth Circuit agreed that discrimination of the type alleged by petitioners would violate the First Amendment, but expresses "serious doubt that (petitioners) are similarly situated to the persons who benefit from the Scientology closing agreement because the religious education of (petitioner's) children does not appear to be similar to the 'auditing', 'training' or other 'qualified religious services' conducted by the Church of Scientology." 282 F.3d at 619. Ultimately, however, the Court of Appeals did not rule on this point, because it concluded that petitioners had failed to prove that their tuition payments exceeded the market value of their children's secular education. Petitioner Michael Sklar, who is not a lawyer, represented petitioners 'pro se' in the litigation concerning their 1994 tax return. Unfortunately, his unfamiliarity with the laws of evidence hindered his proving what is really an incontestable fact, i.e., theat 'auditing' and 'training' in CofS are jurisprudentially indistinguishable from the religious education of petitioner's children. Therefore, in the present action, counsel for petitioners set out to prove this fact in accordance with the rules of evidence.

To this end, petitioners first tried to secure information and documents from respondent, who has been monitoring CofS for decades, through interrogatories and document requests. See petitioners First Set of Requests for the Production of Documents and Things, dated May 5, 2003. Respondent objected, and the Court upheld his objection, without explanation, in its Order dated July 28, 2003.

Petitioners next asked respondent to admit certain facts, which would have established that 'auditing' and 'training' in CofS are jurisprudentially indistinguishable from the religious education of petitioner's children, and that in 1995 respondent permitted, and even today permits, Scientologists to deduct as charitable contributions their payments for auditing and training. See Petitioner's Request for Admissions by Respondent, dated September 3, 2003. Many of these facts were in statements about CofS that respondent made publicly, in court filings concerning CofS. Again, however, respondent objected, and the Court upheld his objection, again without explanation, in its Order dated November 20, 2003.

Finally, petitioners subpoenaed CofS and Rev. Jentzsch to testify and produce documents at the trial of this action. Their testimony and documents also would prove that 'auditiing' and 'training' in CofS are jurisprudentially indistinguishable from the religious education of petitioner's children, and that respondent permits Scientologists to deduct as charitable contributions their payments for auditing and training. CofS and Rev. Jentzsch moved to quash the subpoenas, and respondent moved to exclude from evidence all testimony or documents from CofS and Rev. Jentzsch. The Court quashed the subpoenas, again without any explanation.

Petitioners understand respondent's interest in hiding his unconstitutional conduct from public scrutiny. Petitioners understand CofS's and Rev. Jentzsch's preference not to be involved in someone else's lawsuit -- a lawsuit in which they have no interest whatsoever. The Court, however, should not protect respondent from having to account for his descrimination against practitioners of religions other than Scientology (note 3).

(note 3: Petitioners also respectfully submit that if the Court is not going to permit them to present this evidence, the Court should explain its reasons. Petitioners, any reviewing court, and the public are entitled to know why respondent is being permitted to hide his unconstitutional conduct).

Petitioners are entitled to present evidence that 'auditing' and 'training' in CofS are jurispridentially indistinguishable from the religious education of petitioner's children, and that in 1995 respondent permitted Scientologists to deduct as charitable contributions their payments for auditing and training, because if these facts are true, respondent may not refuse to permit petitioners to deduct as charitable contributions their payments in 1995 for their children's religious education.

Accordingly, the Court should reconsider its three Orders listed above, and should (1) order CofS and Rev. Jentzsch to comply with the trial subpoenas duces tecum that were served upon them by appearing on November 8, 2004, to testify and produce documents at the trial of this action; (2) order respondent to respond to petitioner's requests for admission nos. 1 through 78; (3) order respondent to respond to petitioner's interrogatories nos. 1 through 31 and 35; and (4) order respondent to respond to petitioner's document requests nos. 1 through 20 and 25.

In further support of this motion, petitioners respectfully submit:

1) This action concern's Petitioner's federal income tax return for 1995. Respondent disallowed $15,000. of the $24,421. that Petitioners claimed that year as charitable contributions. Those $15,000. represented Petitioner's estimate of the cost of their children's religious education at Emek Hebrew Academy ("Emek") and Yeshiva Rav Isacsohn Torath Emeth Academy ("Torath Emek").

2) Petitioners contend that they were entitled to claim the $15,000 as charitable contributions, and that Respondent erred in disallowing those contributions, for two reasons.

3) First, I.R.C. $170 permits taxpayers to deduct as charitable contributions payments they make to religious organizations in exchange for which the taxpayers receive only intangible religious benefits. The $15,000. at issue were payments to Emek and Torath Emeth in exchange for which Petitioners received only intangible religious benefits.

4) At Emek and Torath Emeth, religious studies (often referred to as 'Torah Studies') and secular studies are entirely separate.

5) For example, at Torath Emeth, religious studies are always in the morning, and secular studies are always in the afternoon.

6) At Emek, depending upon the grade, religious studies may be either in the morning (in which case secular studies are in the afternoon), or in the afternoon (in which case secular studies are in the morning).

7) In 1995, one of Petitioner's children also attended a daily, after- school class at Emek in Mishna, which is a part of the Talmud. Petitioners paid extra for this class, and those payments were among the charitable contributions that Respondent disallowed.

8) Petitioners deducted only their payments for their children's religious studies, not their payments for their children's secular studies. Therefore, the $15,000 were deductible as charitable contributions, because petitioners received only intangible religious benefits in exchange for those payments.

9) Petitioners' second argument as to why they were entitled to claim as charitable contributions the $15,000 that respondent disallowed is based upon a 1993 agreement between IRS and CofS, pursuant to which in 1995 (and other years before and since) respondent permitted members of the Church of Scientology to deduct as charitable contributions their payments to the Church for what the Church calls 'auditing' and 'training.' (A copy of this agreement, as published by the Wall Street Journal Online, is Exhibit B to Petitioner's Opposition to Third-Parties Motion to Quash Subpoenas and Respondent's Motion in Limine, dated March 19, 2004). (note 4)

(note 4: On information and belief, IRS continues to permit members of the Church of Scientology to deduct as charitable contributions their payments for religious instruction, even though the 1993 agreement between IRS and CofS has expired by its terms).

10) According to IRS, in 'training' courses, 'individuals study the doctrines and tenets of Scientology.' Brief for the Respondent at 3, Hernandez v. Commissioner of Internal Revenue, 490 U.S. 680 (1989) (Nos. 87-963 and 87-1616).

11) According to CofS, 'In training...parishoners study the doctrine, tenets, codes, policies and practices of Scientology.' Brief for the Petitioners at 5, Hernandez v. Commissioner of Internal Revenue, 490 U.S. 680 (1989) (Nos. 87-963 and 87-1616).

12) In their religious studies, petitioner's children studied the doctrines and tenets of Judiasm.

13) Thus, according to both respondent and CofS, 'training' of members of the Church of Scientology is similar to the religious studies of petitioner's children in that each involves study of the doctrines and tenets of the individual's religion.

14) As a matter of law, "unless there is a rational reason for differential treatment, similarly-situated taxpayers should be treated similarly." Oshkosh Truck Group v. United States, 123 F.3d 1477, 1481 (Fed Cir. 1997). "The Commissioner cannot tax one and not tax another without some rational basis for the difference." United States v. Kaiser 363 U.S 299, 308 (1960) (Frankfurter, J. concurring). See also International Business Machines v. United States, 343 F.2d 914, 920 (Ct. Cl. 1965): "Equality of treatment is so dominant in our understanding of justice that discretion, where it is allowed a role, must play the strictest heed."

Continues HERE:

http://www.lermanet.com/scientologylegal/sklar-case-motions.htm#more

If the Ferengi were to breed with the Borg you'd get Scientology http://www.lermanet.com/cos/comedy.html The internet is the Liberty Tree of the 90's http://www.lermanet.com/cos/libertyl.html Ex-Scientologist staff member apoligizes to John Travolta, Mayor Gabe Cazares and the Citizens of Clearwater http://www.lermanet.com/garyweber/ Help getting someone OUT of Scientology http://www.lermanet.com/scientologyhelp/main.html

<hr> Subject: Re: SKLAR - Jewish vs IRS Scientology - 1st Tax Case Documents HERE - Lermanet.com Exposing the CON
From: "Android Cat" <androidcat98@hotmail.com>
Date: Tue, 9 Nov 2004 13:52:52 -0500

arnie lerma wrote: > WEBBED HERE:
> http://www.lermanet.com/scientologylegal/sklar-case-motions.htm
>
> Report from Trial at top of MAIN index page HERE
> http://www.lermanet.com/index.htm

> (note 4: On information and belief, IRS continues to permit members of
> the Church of Scientology to deduct as charitable contributions their
> payments for religious instruction, even though the 1993 agreement
> between IRS and CofS has expired by its terms).
>
> 10) According to IRS, in 'training' courses, 'individuals study the
> doctrines and tenets of Scientology.' Brief for the Respondent at 3,
> Hernandez v. Commissioner of Internal Revenue, 490 U.S. 680 (1989)
> (Nos. 87-963 and 87-1616).
>
> 11) According to CofS, 'In training...parishoners study the doctrine,
> tenets, codes, policies and practices of Scientology.' Brief for the
> Petitioners at 5, Hernandez v. Commissioner of Internal Revenue, 490
> U.S. 680 (1989) (Nos. 87-963 and 87-1616).

http://www.privatebug.org/school-A9700316.html Kindergarten to Grade 8, Affiliations: Nonsectarian

From one girl's description of it, that's certainly not true: http://scientologist.myhomepage.org/meganfoley/myself.htm

"I am 7 years old and I go to the Canyon View Academy and I am in 3rd grade. I really like my school 'cause it's fun and I have lots of friends there. I have two cats named shadow and monster and 1 turtle named wrinkles and my dad has 1 dog named Sam. I am a really good Irish dancer; I dance at festivals and win medals. I like to color and paint, and love to go camping and hiking and swimming. I love to go climbing at the rock gym. And I really like to go in session (auditing*) and do Scientology course because it's fun."

-- Ron of that ilk.

<hr> Subject: Trial opens in couple's bid for religious tax break
From: L. Ron Hubbard <lrh@scientoloogy.biz>
Date: Wed, 10 Nov 2004 11:06:24 -0600

http://www.firstamendmentcenter.org/news.aspx?id=14336

News Story

Trial opens in couple's bid for religious tax break

By The Associated Press 11.10.04

LOS ANGELES � An Orthodox Jewish couple believe the Internal Revenue Service should allow tax deductions for their children�s religious schooling, a lawyer argued during the opening of a nonjury trial.

Michael and Marla Sklar claim that since Church[sic] of Scientology members are allowed to write off the cost of spiritual[sic] counseling sessions, they should be allowed to write off their children�s Jewish school tuition.

The Sklars brought the lawsuit after the IRS ruled their deductions were invalid. The couple�s attorney, Jeffrey Zuckerman, argued that the First Amendment prohibits the IRS from discriminating on the basis of religion.

However, Louis B. Jack, an attorney for the IRS, said a ruling in the Sklars� favor would lead "millions of Americans to start deducting religious school tuition."

"Existing case law is clear, deduction for religious school tuition is illegal, period," Jack said Nov. 8 in the trial in U.S. Tax Court before Judge John O. Colvin.

Michael Sklar, an accountant, testified he amended his 1991 tax return in 1993 to claim part of his children�s tuition as a charitable contribution. "The same benefit is given to a particular sect, Scientologists, and there�s no reason it shouldn�t be applied to someone else," he said.

He said his move was prompted by the 1993 accord reached between the IRS and the Church[sic] of Scientology that gave the church[sic] tax-exempt status and allowed members to write off the cost of spiritual counseling sessions. The agreement was not made public, but a copy was ultimately leaked to The Wall Street Journal.

A telephone call to an attorney for the Church[sic] of Scientology International was not immediately returned. The church[sic] is not a party to the lawsuit.

Sklar was allowed the deduction for several years because of confusion about whether he was a Scientologist. After a 1994 audit, the IRS disallowed the deduction. The couple sued in 1997 and lost. A three-judge panel of the 9th U.S. Circuit Court of Appeals upheld the tax court ruling in 2002 in Sklar v. Commissioner of Internal Revenue. http://www.ca9.uscourts.gov/ca9/newopinions.nsf/2E057485A6713B9E88256B6D0060425A/$file/0070753.pdf

Sklar argued that the tuition was a charitable contribution and could be deducted because his children received an "intangible religious benefit."

The current lawsuit was filed in 2001 over a 1995 tax return in which the Sklars claimed about $15,000 in religious deductions for four of their children. The couple would have saved about $3,200 in actual taxes if the IRS had granted the deductions.

Zuckerman said that during the trial he would show the similarities between Scientology�s religious instruction and the religious instruction received by the Sklar children.

"Every practitioner of every religion has the right to deduct religious instruction, if the Church[sic] of Scientology is allowed to do that," Zuckerman said.

Colvin will not allow testimony in the case from the Church[sic] of Scientology, Zuckerman said.

The secret agreement between the IRS and Scientology also may or may not be admitted as evidence. Zuckerman submitted a copy of the agreement, but Jack objected.

The judge said he would consider if it could be admitted into the court record.

L.A. couple seeks tax deduction for kids' religious school tuition Michael and Marla Sklar say IRS should allow their deduction because agency permits Scientologists to write off the cost of spiritual counseling, instruction. 04.02.04 http://www.firstamendmentcenter.org/news.aspx?id=13127

Related News summary page View the latest news stories throughout the First Amendment Center Online. http://www.firstamendmentcenter.org/newssummary.aspx

<hr> Subject: Can a secret IRS Closing Agreement TRUMP the US Supreme Court? Sklar versus IRS/Scientology - filings
From: arnie lerma <alerma@bellatlantic.net>
Date: Sat, 13 Nov 2004 11:20:00 GMT

The motion by Sklar that this is in reply to is here: http://www.lermanet.com

Sklar Motion #2:

Transcriber's note: Observe how emphatically the IRS Counsel tries to protect the interests of Scientology, by stating that "ALL" (with emphasis) documents pertaining to them should be excluded from admission to the case! In part, this can be seen as a retaliatory reaction, filed the day after the Petitioner's motion of Nov. 4, 2004, and reportedly received by fax at Petitioner's Counsel at 7:30PM on Friday evening (at his Washington DC office). It also can be seen as a method of using procedural objections, to exclude evidence from being considered by the presiding Judge, who will issue a written opinion as the decision in this case.

The Peitioner's Counsel complained of this as "prejudicial" treatment in open court on Monday morning November 8th, as the US Government is effectively "stonewalling" any comparisons of IRS agreements with Scientology members with the deductions allowed to any taxpayer claiming similar religious training.

(Editor's note ; Hernandez vs Commissinoer (cited below) is the Supreme court ruling that held that FIXED PAYMENT "DONATIONS" were NOT tax deductible. the question is whether the IRS can, via a secret closing agreement, trump the SUPREME COURT!!!! )

United States Tax Court Motion filed November 5, 2004 Docket #395-01

Michael & Marla Sklar, Petitioners v. Commissioner of Internal Revenue, Respondent

Supplement to Respondent's Motion in Limine

By order dated October 28, 2004, the Court granted respondent leave to file a Supplement to his Motion in Limine filed March 12, 2004. The Order further provides that this Supplement must be received by the Court on or before November 4, 2004.

Wherefore, respondent shows unto the Court as follows:

1) This case is set for trial before the Honorable John O. Colvin on the calendar commencing November 8, 2004, in Los Angeles, California.

2) Respondent's Motion in Limine filed on March 12, 2004, requests the Court to exclude from evidence the testimony of Reverend Heber C. Jentzsch and any other representatives of the Church of Scientology petitioners may call as witnesses, as well as any documents that might be sought from those witnesses.

3) By way of a supplement to the relief requested in the foregoing motion and for the reasons previously stated in the foregoing motion, respondent asks that the exclusion from evidence extend to ALL* documents pertaining to the Church of Scientology, including those documents identified in petitioner's recently filed motion to compel stipulation as Exhibits 46-P, 47-P, 48-P, 49-P, 51-P, 53-P, 61-P, 62-P, 63-P, 64-P (note 1).

(* Emphasis for this 1 word in original document; italicized)

(note 1: Exhibit 46-P purports to be the government's brief filed with the Supreme Court in Hernandez v. Commissioner.

Exhibits 47-P and 48-P purport to be the respondent's opening brief and reply brief filed with the Tax Court in Garrison v. Commissioner.

Exhibit 49-P purports to be a memorandum and attachments dated January 13, 1992, from the I.R.S. Examination Division, Planning and Special Programs Compliance Support Section, regarding procedures for auditing tax returns claiming Scientology-related Contributions and Deductions.

Exhibit 51-P purports to be "The Bridge to Total Freedom: Scientology Gradation and Awareness Chart of Levels and Certificates" published by the Church of Scientology.

Exhibits 53-P, 61-P and 62-P purport to be a brief, a supplemental brief and a reply brief that the taxpayers filed with the Supreme Court in Hernandez v. Commissioner.

(Editor's note ; Hernande vs Commissinoer is the Supreme coyurt ruling that held that FIXED PAYMENT "DONATIONS" were NOT tax deductible. the question is whether the IRS can, via a secret closing agreement, trump the SUPREME COURT RULING!!!! )

Exhibit 63-P and 64-P purport to be a breif and surreply brief that the taxpayers filed with the Tax Court in Garrison v. Commissioner.)

4) The Court's previous rulings have consistently recognized that unrelated litigation involving the Church of Scientology is not in any way related to this case. For this reason, the Court issued two Protective Orders excusing respondent from complying with petitioner's formal discovery requests and requests for admissions insofar as they pertained to the Church of Scientology. Likewise, the Court granted a Motion to Quash petitioners' subpoena on Reverend Heber C. Jentzsch, President, Church of Scientology. See Orders dated July 28, 2003, November 20, 2003, and March 22, 2004.

5) By way of further supplement to the relief requests in respondent's pending Motion in Limine, respondent requests that the Court also exclude from evidence the documents identified in petitioner's motion to compel stipulation as Exhibits 50-P and 52-P.

6) Exhibit 50-P purports to be a redacted copy of an I.R.S. Field Service Advice Memorandum dated April 27, 1999, concerning whether tuition payments to Jewish religious schools are deductible as charitable contributions. Although the legal issue discussed in the memorandum is closely related to the issue in this case, the memorandum may not be "used or cited as precedent." I.R.C. $6110(k)(3).

7) Proposed Exhibit 52-P is a document entitled "Summary of California Laws Relating to the Establishment and Maintenance of Private Schools, Kindergarten, Elementary, and High School Grades." This document states on its face that it "does not contain the exact language of all of the laws referenced." Instead, they are editorial summaries of those laws. Furthermore, the document does not indicate the effective dates of any of the laws.

8) Fed. R. Evid. 1006 provides that the contents of voluminous writings which cannot conveniently be examined in court may be presented in summary form if the writings are made available for examination or copying, or both, by other parties at a reasonable time and place. These summaries go beyond the scope of a "chart, summary or calculation," within the meaning of Fed. R. Evid. 1006 and are therefore, inadmissable. Seykota v. Commissioner, T.C. Memo 1991-234. These paraphrased summaries of state law without effective dates are not evidence, nor are they a proper subject of stipulation, nor are they useful or relevant. The summaries are also inadmissable heresay.

9) Petitioners are free to ask the Court to take judicial notice of the actual provisions of state law or to cite actual provisions of state law on brief. But the summaries of state law identified as Exhibit 52-P should be excluded from evidence.

Wherefore, it is prayed that Respondent's Motion in Limine, as supplemented herein, be granted.

(On behalf of Donald B. Korb, Chief Counsel, Internal Revenue Service)

by Louis B. Jack Senior Counsel (IRS) Laguna Niguel, CA office

The motion by Sklar that this is in reply to is here: http://www.lermanet.com

<hr> From: Zorrosblade........Z <zorrosblade@fastmail.fm>
Subject: Scientology settlement puts IRS in a Kosher Pickle (Sklar Case)
Date: Thu, 25 Nov 2004 04:58:57 -0800
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snip> Brody, who serves on the American Bar Association Tax Committee, said the 9th U.S. Circuit Court of Appeals has already ruled on the disparate treatment argument. "They said it doesn't matter how the Scientologists are treated, and, anyway, the Scientologists shouldn't have gotten what they did," Brody said. "That's why we're all watching the case -- we've been expecting it." He added, "When the IRS settled with the Scientologists, after they'd beaten them, we knew deductions for tuition would come into question."

snip> If the Sklars prevail, it will drive the issue back to Congress, according to Gail Richmond, a professor of law and associate dean at the Shepard Broad Law Center of Nova Southeastern University in Florida. "It will force the IRS to come up with a calculation and the next fight will be over where that line is," she said.

Full Story: http://www.law.com/jsp/article.jsp?id=1101136522270 Scientology Settlement Puts IRS in a Kosher Pickle The National Law Journal 11-29-2004 (released 11/25/004)

Tax lawyers are watching a trial in Los Angeles that pits an orthodox Jewish family against the Internal Revenue Service over whether tuition for religious education is deductible -- based in part on a "secret" settlement between the IRS and the Church of Scientology.

"It's not clear that [plaintiffs] Michael and Marla Sklar will win, but if they do, it may well mean that millions of families will be able to deduct some portion of private religious school education," said professor Evelyn Brody, a Chicago-Kent College of Law tax specialist. "It would force the IRS to deal with millions of dollars in new deductions and it would overwhelm them."

Elizabeth Pierson, a tax attorney with Los Angeles' Hoffman Sabban & Watenmaker, said the case has tax lawyers' attention. "The Sklars are trying to establish a brave new world where private compromises between the government and taxpayers can be relied on by unrelated taxpayers, not the norm," she said. "And it's a constitutional question of the separation of church and state, because, if religious education becomes deductible, it means that taxpayers are subsidizing religion."

The fight is over $3,200 in taxes Sklar saved by deducting about $15,000 in tuition for his children's religious education at an orthodox school in Los Angeles. Sklar v. Commissioner, 000395-01 (U.S. Tax Ct., L.A.). Michael Sklar, who is an accountant, sued the IRS over the same deduction in 1997 over his 1994 return and lost. The current suit is over his 1995 tax return.

IRS attorney Louis Jack said he is not allowed to comment on the case. But in his opening remarks, Jack said that case law is clear that tuition for religious schooling is not deductible.

The Sklars have launched two arguments. First, according to Jeffrey Zuckerman, the family's attorney, Congress amended the tax code in 1993, adding intangible benefits from charitable donations to the list of things that are deductible. For example, a $125 ticket to a fund-raising dinner is reduced by the value of the dinner, and the difference can be deducted.

Sklar argues that part of the tuition, the excess beyond the actual cost of private secular education, which is considered tangible, can be deducted.

Second, the IRS struck a 1993 deal with the Church of Scientology that allows Scientologists to deduct the cost of training and auditing, a form of religious education, which means that all religious tuition should be deductible. Auditing refers to one-to-one encounters with church officials, through which the student becomes aware of his or her spiritual dimension. Training refers to doctrine classes, according to the U.S. Supreme Court opinion, Hernandez v. Commissioner, 490 U.S. 680 (1989). The settlement, which came after the 1993 opinion, ended a battle between the IRS and the church that began in the 1960s when Scientologists lost their IRS standing as a church.

"The IRS has publicly called them a church and described training and auditing as deductible," said Zuckerman, an antitrust and labor lawyer with the Washington, D.C., office of New York's Curtis, Mallet-Prevost, Colt & Mosle. "That recognition should be extended to all religions, and it is discrimination not to."

Brody, who serves on the American Bar Association Tax Committee, said the 9th U.S. Circuit Court of Appeals has already ruled on the disparate treatment argument. "They said it doesn't matter how the Scientologists are treated, and, anyway, the Scientologists shouldn't have gotten what they did," Brody said. "That's why we're all watching the case -- we've been expecting it." He added, "When the IRS settled with the Scientologists, after they'd beaten them, we knew deductions for tuition would come into question."

If the Sklars prevail, it will drive the issue back to Congress, according to Gail Richmond, a professor of law and associate dean at the Shepard Broad Law Center of Nova Southeastern University in Florida. "It will force the IRS to come up with a calculation and the next fight will be over where that line is," she said.

-- -- For flame 'players' this past week: "If you stick your head above the crowd, there will be someone quite happy to cut it off" --Allan Dwan

Source: (Bogdanovich on Bogdanovich)

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