Squirrel busters evidence of Tax evasion?

Discussion in 'Think Tank' started by Anonymous, Oct 13, 2013.

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  1. Anonymous Member

    As many of us are familiar, Monique Rathburn is suing $cientology for harassment. What many of us are not familiar with, is the current tax code.

    As the above link indicates, any side job produces taxable income, and there is no-minimal amount to report.

    But what does this have to do with the rathburn lawsuit? Plenty. The head of the squirrel busters at the time claimed to be both a private investigator, AND a journalist(under the law, this means that he had to report his earnings from this as either freelance journalism, or as an investigation, both are very damaging for the "church" in this lawsuit). Furthermore, the "documentary" they put on the internet, generated ad revenue, therefore, produced side revenue under the current tax code. My hypothesis is that $cientology FAILED TO PROPERLY DOCUMENT THE EARNINGS. That the people that did the "investigation" for the rathburns failed to document their pay from $cientology, and are guilty of tax evasion, on a federal and local level(Texas, the county, and the city in which they operated).

    I feel that reporting this to the local tax authorities would have several damaging consequences to $cientology. First off, it would assist the rathburns lawsuit by showing that Co$ spent parish money and profited off of their harassment, It would severely threaten Co$ tax exempt status, and it would FORCE an IRS tax assessment on CO$ operations to determine the tax exempt status for many of their front groups and the "church" itself. Keep in mind that while churches hardly loose their tax exempt status, many non-profits have. Co$ has many "non-profit" front groups that they use for recruiting, the loss of tax exempt status would cause the "church" to dissolve these front groups.

    Whats needed for this to become an operation? Unfortunately plenty. We would need to see what sites the squirrel busters documentary was on, what the ad-baner revenue was, and who made money off of it. We would have to figure out how the squirrel busters were paid during their operations, and what the local tax code concerning it was. they did in fact rent a house near the rathburns, that also opens up a whole slew of tax code violations, because if no one was living there, then it was being used as commercial property in a non commercial zone, and thus proper taxes were not paid.

    I apologize if this is overly long and complicated. I am tax accountant, and the tax code is overly long and complicated

    furthermore, even if this idea turns out to be a dud, keep it around, because from what i understand, the OSA freaks out hardcore when taxing the "church" gets mentioned.
    • Like Like x 6
  2. Rod Keller Member

    I think the IRS would rather eat lint than re-open the Scientology exemption. I would think only a confirmed Commissioner would be able to do it, and we haven't had one of those for two years now. I don't think anybody will be inspired to investigate them.
    • Like Like x 1
  3. DeathHamster Member

    Yep, although it would be interesting to see how far an investigation into something on the edges of Scientology got before being stepped on from above.
    • Like Like x 2
  4. Rod Keller Member

    I don't think there's any interest by anybody at any level.
  5. OTeleventy Member

    • Like Like x 3
  6. IRS are pussies, not the Terminator organization we have in the Netherlands
  7. Anonymous Member

    the funny part, is that its NOT just the IRS jurisdiction. They have STATE, COUNTY, and CITY taxes as well. Tax code is fucking archaic. So they have the potential for 4 TAX agencies going after: CO$, each individual squirrel buster, the branch of CO$ that posted the "documentary" on the internet, and even Mscaviage.

    Then there are the "auditors". IS that a service, or a religious right? They are charging money for it. So does that mean that Local governments can tax the service? Just because you have IRS tax exemption does not mean you have local tax exemption......
  8. Anonymous Member

    The goal is not so much to remove their tax exemption, but to cause a big enough shit storm that they have to spend a ton of money to put it out. It also opens up more avenues for them to incriminate themselves. After all, part of the scilon doctrine seems to be foot-bullets.
    • Like Like x 2
  9. Anonymous Member

    "Sec. 151.0075. "SECURITY SERVICE". "Security service" means service for which a license is required under Section 1702.101 or 1702.102, Occupations Code."

    this goes back to the licensed PI bit. Death hamster found his license had expired. Aside from being a direct violation to state law as well as fraud, this is evidence of tax evasion committed by Scientology on a state level. This man claimed to be doing investigative work, that is TAXABLE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!.

    Furthermore, the state requires records to be kept. Failing to keep these records means fines. Keeping records means that they can be subpoenaed for lawsuits.

    If we put our mighty powers of Trolling, dickishness, and shear assholery together, we might be able to force the IRS to investigate CO$ again, simply by having state tax investigations take place. considering how Texas is a republican state, the political pressure may be too much for the IRS to ignore.

    The least that can happen is we give little Davy a headache and make his life a living hell.
    • Like Like x 3
  10. DeathHamster Member

    I forget, but wasn't that for Jim Lynch? A complaint about him now might be a little late, as it were.
  11. Anonymous Member

    Sec. 151.057. SERVICES BY EMPLOYEES.

    1) a service performed by an employee for his employer in the regular course of business, within the scope of the employee's duties, and for which the employee is paid his regular wages or salary;

    This means that if CO$ wants to avoid Texas state taxes, then they would have to admit wrong doing. They would have to admit breaking the law.

    If the PI was doing the documentary for the CO$, then Co$ would not be guilty of tax evasion, just guilty of harassment.
    If The PI was doing it for on of the Co$ non profits, then they WOULD be guilty of tax evasion, and still be guilty of harassment.

    This is just a "taste" of tax law.

    As for the IRS not wanting to revoke Co$ tax exempt status, They are hiring a lot of people nationwide for their tax exempt departments.
    I am suspicious that they may be planning something big, but lack the dox to make any worthwhile guesses :(. Please keep in mind that new changes
    to the tax code have been made, and tax exempt status is much harder to get and maintain now.
    • Like Like x 1
  12. Interesting idea op.
    And there is no harm in trying.
    The only problem I see with it is would the cost of recovering the alleged tax money.
    Be more the then the tax owed?
    If so then won't do anything.
    But it's worth a shot
  13. Anonymous Member

  14. Anonymous Member

    No, because on top of the amount owed, they would also have to pay for the collections( Not 100% sure on that however), it varies by state. Chances are however, that if Co$ was stupid to pull this stunt, that they probably were too stupid to fully investigate the tax ramifications as well.

    Then there is the interest.
  15. Anonymous Member

    One thing to keep in mind, is even if we fail, Davy will take out all his rage and frustrations on the OSA, for bringing about this type of shitstorm. I see this more as an attack on the OSA then an attack on CO$, and trolling trolls is just too much fun to pass up.
  16. tinfoilhatter Member

    What other illegal shit would a CO$ tax investigation bring to light? Scratch a liar, catch a thief as it has been said.
  17. Good point.

  18. Anonymous Member

    "Excess benefit transactions may cost a minister up to 325 percent times the excess benefit. Most ministers are not familiar with the term intermediate sanctions. Since 1995, the Internal Revenue Service may impose an excise tax (sanction) on ministers and other church leaders who receive excess benefits from a church. Most tax professionals refer to this excise tax as an intermediate sanction.
    Excess benefit transaction includes many facets. It applies when someone in authority receives more money from the church than is appropriate under the circumstances. For example, an excess benefit transaction is any taxable fringe benefit the minister receives,1 but he and/or the church fail to report the benefit as taxable income.
    Another type of excess benefit transaction arises when the minister receives an unreasonable amount of compensation. I list further explanations of these excess benefit transactions below.
    In addition to the minister’s exposure to the 325 percent of the excess benefit, other church leaders who allow excess benefit transactions may pay a 10 percent penalty as well. This statute caps the sanction at $20,000 for church leaders who allowed the benefit but did not personally benefit from the transaction."

    • Like Like x 2
  19. Anonymous Member

    "To remain tax exempt, all church assets, including sermons, must be used exclusively for exempt church purposes. Stated another way, a church may buy goods and hire employees that further its exempt purpose. It cannot, however, do anything that helps the minister make money on the side, such as becoming an author. The church, of course, may sell the sermons to the minister at fair market value."

    Fair market value, what is the fair market value of the "basics" that they try to force on people? This is incredibly comprehensive, if you read black rob's thread, then you would see the bullshit videos, lectures, books, classes, etc that the scilons charge for. Basically, all those services are taxable. So are they paying taxes on them?
    • Like Like x 2
  20. Anonymous Member

    Churches must pay unrelated business income taxes when they engage in certain activities. Since 1954, the Code has imposed an income tax on tax-exempt organizations that engage in certain activities. These rules apply to churches, but churches routinely ignore them, sometimes out of ignorance and sometimes out of the misplaced notion that the IRS will never catch them.
    Unrelated business income is an extremely complex topic. A church should not assume that the general rules discussed below are absolute. A single fact can turn UBI into tax-exempt income. If a church receives $1,000 or more of UBI, it must file Form 990-T with the IRS. Once a church believes it is required to file Form 990-T, it should engage a nonprofit tax professional to evaluate all sources of income to determine the proper amount of UBI for the church.
    Two concepts are fundamental to understanding UBI. First, income from passive sources, such as interest, does not qualify as UBI. A church may generally earn interest or dividends without triggering UBI. Second, the way the income is spent by the church has no bearing on whether or not the income creates UBI. Many church fundraisers create UBI even though the church applies all funds to legitimate church purposes. For example, the church sells cookie dough to raise money for missions. The application of the funds to missions, an exempt purpose, does not affect the analysis for UBI purposes.
    Generally, a church creates UBI based on the analysis of these three elements: (1) the church receives income from a trade or business; (2) the trade or business is regularly conducted; and (3) the trade or business is not substantially related to the church’s exempt purposes.
    This analysis starts by looking at whether others conduct similar activities for a business. For example, if the youth conduct a car wash to raise money for the youth department, then the income from the car wash represents a trade or business because others operate car washes for profit-making purposes.
    The second element looks at how regularly the church conducts the activity. For example, the church decides to conduct a garage sale one time. Though the activity may create UBI if regularly conducted, since it occurred once, the garage sale will not create UBI. For seasonal businesses (think the sale of Christmas trees), operating during the appropriate season will be deemed regularly conducted.
    Finally, the activity cannot be substantially related to an exempt purpose. For example, the sale of Bibles will not create UBI because the sale of Bibles promotes the gospel, an exempt purpose. In contrast, the sale of the latest Dr. Phil book likely creates UBI.
    In addition to the three elements discussed above, the Code contains three exceptions to the above rules. First, the sale of merchandise for the convenience of members and employees will not create UBI. As a result, the sale of soft drinks in the youth center will not normally create UBI. Second, the sale of donated merchandise will not create UBI. If the church operated a used clothing store that sold only donated clothes, then the store’s operation will not create UBI. Third, if the activity is operated by substantially all-volunteer labor, the activity will not create UBI. If volunteers provide substantially all the labor for the youth car wash, then the youth car wash will not create UBI.
    Frequently churches operate bookstores. Bookstore operations, under normal circumstances, do not create UBI. In examining a church bookstore, the IRS determines UBI by an item-by-item analysis of the items sold. If all the items sold relate to exempt purposes, such as promoting the gospel, then the sale of those items does not create UBI. If the bookstore sells gift items or breath mints that are not related to an exempt purpose, then the sale of these items creates UBI unless one of the exceptions to UBI applies. If the bookstore is operated solely around service times, the bookstore operation will not generate UBI because it is operated solely for the convenience of its members. Also, if volunteers operate the bookstore, the substantially all-volunteer exception will apply and sales from the bookstore will not generate UBI.
    A related category of activity can create UBI, though the activity is passive. It is called debt-financed income. In this category, rents generated from real estate assets purchased with debt are UBI. Rents generated from the rental of personal property, such as tables and chairs, create UBI.
    Closely associated with UBI is sales tax. In many states, the sale of merchandise creates a taxable event requiring the church to collect sales tax on the transaction, even though the church is exempt from paying sales taxes on its purchases. In most states, churches are required to collect sales tax from their bookstore sales. The church should check with its local sales tax office to determine its responsibilities regarding sales taxes.

    In English: This goes way beyond the rathburns. EVERY CCHR documentary means that CO$ owes taxes. Every documentary that the church does OWES TAXES. Simply because there are people that make money off of documentaries. Once they pay a contractor for anything that they charge money for, they must pay a tax. If they charge money for the super power building opening, they must pay a tax because they have paid outside contractors to set up the tent, or for any other work.

    They have been illegally evading taxes for years, in fact, by getting tax exempt status, their "business model" becomes more heavily taxable then if they had simply been a self help corporation.

    What does this mean for us, and what can we do? We need to document every incidence of outside contractor work for CO$, as well as the money they charge for the services. We need to report every one who speaks and gives seminars for Co$, if money was charged to attend the event. The classes that they advertise on craigs list also may be taxable, because they are charging money for doing them and are doing them on a regular basis.

    Tax law is complicated, even if you think you have a loophole for everything you will get into trouble. "During the last 30 years, the Internal Revenue Code has grown to over 5.5 million words" All of which are designed to take money from you.The best way to fight a crook, is sometimes with a bigger crook.
    • Like Like x 4
  21. Anonymous Member

    Frank Sommerville, J.D., CPA

    this is the man who wrote the article that the above information came from. He operates out of Texas, and would probably be the best source to get in touch with. Can any anon out there get in touch with him and ask what the Scilon tax liability to the state of Texas is for their stupid ass squirrel busters stunt? IF its a good idea?

    this is a real big gray area for me. Never would i have imagined the shear bureaucratic complexity around church based tax exempt status. But from what i have seen, Hubbard may have been wrong about the religion making your rich thing. It appears that churches are taxed far more heavily in america then we could ever have dreamed of. the scilons have been oblivious of the dangers for years, but their tax exempt status from the 90's may really have been the death of their "religion".
    • Like Like x 2
  22. Anonymous Member
    2. Lobbying

    When an organization contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or when the organization advocates the adoption or rejection of legislation, it is lobbying. “501(c)(3) organizations are allowed to do some lobbying,” said Melaney Partner, acting director for the IRS Exempt Organizations Customer Education and Outreach office. “However, if lobbying activities are substantial an organization risks losing its tax exempt status.” She added that an organization can elect to have its lobbying activities measured by an “expenditure test” to determine whether or not the activities are substantial. This is known as a 501(h) election, so-named for the section of the Internal Revenue Code where the rules for the expenditure test are spelled out.
    “By making this election, an organization agrees to not spend more than a certain percentage of its total expenses on lobbying activities,” Partner said. “The other way to measure lobbying activity is to determine whether, based on all of the pertinent facts and circumstances, an organization’s lobbying comprises a substantial part of its overall activities. This substantial part test is a more subjective method compared to the more mathematical, objective expenditure test.”
    Organizations must file Form 5768, Election/Revocation of Election by an Eligible Sec. 501(c)(3) Organization to Make Expenditures to Influence Legislation, in advance to be subject to the expenditure test.

    I believe that CCHR violates this on a daily basis.
    • Like Like x 4
  23. Anonymous Member

    Posts 18 - 22 above contain highly valuable information.

    Many thanks to the Anon that posted the material.
    • Like Like x 3
  24. Anonymous Member

    This is a long time coming. How many people died so these idiots could save a few pennies? How many lives ruined? How much damage done to our society? No, they insisted on having all the benefits of a religion, well guess what, those benefits came with a tax responsibility, and its DAMN TIME WE HELD THEM TO IT!!!!!!
  25. Anonymous Member
    Please note:
    posts 18 to 20 come from this link. I felt i need to clarify that this came from just one source. Later i will break out the relevant volumes of the tax code for review. Those volumes are thick, and have very small print. There is a lot more to this. The scilons business model as a religion can not exist under the current American tax code.

    I will also post some of the lovely tax terms so the OSA can attempt to word clear them.
    • Like Like x 3
  26. Anonymous Member

    Am I missing something?

    Where are the dox that show they didn't pay taxes on the money they got?
    Where are the dox that show they didn't pay taxes?
    Where are the dox?
  27. Anonymous Member

    All this is what remains to reveal and then, perhaps to expose.
  28. Anonymous Member

    OP - just wondering what your thoughts are on stuff like all the well documented gifts Slappy has made to Tommygurl over the years, using Sea Org labour and church funds... like the motor bike, trailer renovations, burl wood pens and specially planted meadow .. taxable benefits to both? likelihood of declaring/paying? too long ago?
  29. RightOn Member

    where is the dox to show they did pay? lol
    goes both ways.
    I hope all will be forth coming
    • Like Like x 2
  30. Anonymous Member

    From what i understand, 10 years, However, I am still reviewing the tax code, because this shit got stupid complicated. Why? AUDITING.

    Is auditing a religious right? If so, that means that all auditor fees HAVE TO GO TO THE CHURCH. However, are they claiming its a therapy as they do with the stress tests, because it then becomes taxable. All those classes that they advertise on Craig's list for the public, are taxable.

    "Where are the dox that show they didn't pay taxes on the money they got?
    Where are the dox that show they didn't pay taxes?
    Where are the dox?

    This is in the think tank because i want to propose an OP. However, this op will be the most different and unique OP ever, it will be a dangerous OP, for it will send many scilons to jail, not just DM. It will require a lot of DOX, dox that the stupid scilons made available to the public. Dox found in many states . It will require sending the dox to the different state tax agencies, because every state has their own tax code. This will cause massive tax investigations across the country, triggering a mandatory IRS investigation. Make no mistake, this will be the most difficult, complicated operation ever, because it involves the TAX code, something that was deliberately designed to be complicated and get people into trouble.

    This is a DOX gathering operation. The following is needed:
    Dox on every "service" Co$ charges for. This includes: Classes not advertised as religious classes, tours on the freewinds(maybe, this one is difficult), self help seminars, books not written by lrh but have the scientology logo, videos CO$ puts out and chargers money for, etc etc(there is a lot of it)

    Dox on lobbying: Every time CCHR organizes a protest, connections with CCHR and sea org, every time sea org contacts a politician, every time a potential politician visits sea org, all scientology property in state capitols that is not a "church", Every time a politician visited a scientololgy facility outside their district.

    Dox on all outside labor scientology hired: Cameramen that were paid to film CO$ videos, People that were paid to set up services, people paid to set up their websites, and anything else where outside labor was hired and money was collected.

    Other dox that may seem pertinent.
    As for statues of limitations, Most states have NO statue of limitations on sales tax.

    Make no mistake, this WILL BE TEDIOUS. The operation will be a success once multiple investigations are triggered. Why? because if any investigation is triggered, and evidence of criminal wrongdoing is discovered, then MOAR investigations will happen. This operation will also be expensive to CO$, and will force the states as well as other countries to further scrutinize them.

    But first i have to do research. This will take a long time.
    • Like Like x 3
  31. Anonymous Member

    Its 3 years, not 10. If it happened more then three years, and was NOT more then 1 million in assets, then there is nothing that i can think of on the federal level. HOWEVER, i do not know what state,county,or city it happened in so there may be other rules to it as well. That's just the gift tax side.

    Is tommy gurl a minister in the "church"? If so, then that falls under excessive fringe benefits, I have no idea what the statue of limitations for that would be.

    Taxes are very complicated. There are sooooo many federal/state rules. Chances are, we can catch the scilons making a nasty, expensive mistake somewhere.
    • Like Like x 3
  32. Anonymous Member

    One thing that is bothering me, Is the religion officially based in the US? Their overseas holdings are susceptible to us tax laws as well, so anything that makes money overseas that is not directly connected to the religion will result in them inuring a tax liability.
    • Like Like x 2
  33. Anonymous Member

    Doesn't work like this in practice.

    In some places they have gotten exemptions (eg: Australia). For most of Europe, where they generally do not have exemptions, they have a little trick. Most European countries have a progressive tax system, which links the amount of tax you pay to the amount of tax you earn. There is tax on purchases/sales, but most business don't experience an effect over this (the tax only really hits end consumers). For practical purposes, the main tax they would be liable for would be income (after expenses) tax. So, in most locations, they engineer it so any profit margin is close to zero.

    It works like this. Suppose they earned $100,000 profit in a given tax year. They would use that cash to send staff on training to the US, and would write that expense off against their income. The effect would be to leave their books showing no profit – and any % tax on little or no profit is little or none. The money has been funnelled to the US practically tax free.
  34. Anonymous Member

    HELL, that's not tax free at all. That counts as an excessive fringe benefit. Especially since most of that training is available to most scilons( as i under stand it). Not sure if the tax burden for that hits the chruch, or if it hits the staff though. Furthermore, even if they were not paid, but were offered the classes as a discount, then they count as employees, and the prices of the classes would have to have been reported for tax assement.

    Quotes from the IRS:
    "Educational assistance Exempt up to $5,250 of benefits each year. (See Educational Assistance , later in this section.)"
    I hope those classes were not over that amount.
    "You can generally exclude the value of an employee discount you provide an employee from the employee's wages, up to the following limits."
    • "For a discount on services, 20% of the price you charge non-employee customers for the service."
    • "For a discount on merchandise or other property, your gross profit percentage times the price you charge non-employee customers for the property."
    Them busing in foreign staff to the states for training means that those staff are susceptible to the taxes on this in america.

    I forget they did this. From what i have seen, it appears that this attempt to evade taxes actually greatly increased their burden(this is very common with taxes)
  35. Anonymous Member
    This source looks pretty good, and i am seeing a theme here, It appears From this and other sources, I have a hypothesis as to why David Miscavage is afraid to go to Texas.

    If it is verified that David Miscavage is the head of the church of Scientology, then the IRS will have to assess his: Fringe benefits, And his pay. They would then have to determine if it is excessive compared to the number of parishioners he has compared to their conditions(it will be). He would then face sanctions from the IRS, owe back taxes,possible jail time and further investigations to determine the extent of tax liability.

    Just a hypothesis. The more i read, the more complicated i find this whole situation.
    • Like Like x 1
  36. Anonymous Member

    Any docs showing this to be a benefit to joining staff would be greatly appreciated. It would demonstrate a Tax liability.

    Ironically, this was not an old rule, it was established in 1996 for some reason..........
  37. Anonymous Member

    You've completely missed the point and your whole post is way off base.

    In most European companies the tax system operates on profits. The tax bill is calculated as a % of profit earned (profit being sales less expenses). So increase your expenses to cancel out profits and you have no tax bill under such a system. By wasting company money on training at US orgs as an expense the money is flowed to that US org – escaping the tax system of the country in which the Scientology 'profit' was earned.
  38. Anonymous Member

    this is based on the American tax system, not the European one. This has nothing to do with Europe. This is the american tax system. In america, you pay taxes even if you have a loss. IF you are a corporation, then you MAY get deductions. $cientology is a church meaning that THEY ARE LIMITED IN THE DEDUCTIONS THEY CAN CLAIM. What we are talking about here is the FRINGE BENEFIT TAX.

    Once they set foot in america, as employees(yes they count as employees under the tax code here) of CO$ there classes become a tax liability.Because the staff were sent to america to receive the benefit of the classes, they have a tax liability for all classes exceeding $5,250. In fact things just got more complicated. Did they fill out an immigrant visa? How long was their stay in the states? IF they were sea org, then they also have to report their tiny wages on W2s.

    I haven't even gotten to the Florida or the California taxes on this.

    Because this is the American tax code its overly complicated. It is designed to be overly complicated. It is not fair. In america, bankrupt people get thrown into jail if they can not pay back taxes, or current taxes. In america, if you can not pay your property tax, then the government will take your house away.There is a reason why the IRS is viewed as merciless, they are.

    So just because CO$ failed to make a profit overseas doesn't mean that they don't owe the IRS money for the fringe benefits that they pay their staff.
  39. Anonymous Member

    One thing that will help in this research, is to see a list of everything that they sell, offer services for, or take money for. I have a feeling it will be a big list. This will help give us an understanding as to their business model.
  40. Anonymous Member

    The IRS doesn't have to do squat if they don't want to. That's been the problem for the last 20 years.
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