Part 4: Interal Revenue Service in the United States: IRS and Churches

About the Internal Revenue Service and government taxes involving religion and churches, the SSS and Scientologists.

Let's Audit the IRS

Churches have come under the attack of IRS for some time. In 1969 the IRS established the SSS (Special Services Section). The IRS admonished its members not to attack too strong an organization. Just the ones that would not attract national attention. Some of those attacked were churches, the Boy Scouts, and other nonprofit groups. The SSS achieved a great deal of notoriety during the Watergate hearings. The IRS, fearing public censure of its activities, disbanded the group "officially," However, recent subcommittee hearings indicate it may still be in operation. The SSS gathered information on some 16,000 entities including intellectuals, artists, activists, and opinion leaders of American society. Some of these were on President Nixon's famed "Enemies List." Unfortunately, most of the information has not been released, not even to Congress. Much of this evidence, which is in the hands of the FBI, proves that the IRS has used the material to harass these carefully selected people greatly. National statistics showing IRS audit rates indicate an average of 14% audited in the general "enemies" earning range. However, the SSS list rate was as high as 28%. A double figure. Yet the IRS declared it was not inflicting undue harassment. A recent investigation into the IRS dated December 20, 1973, states: "The Collection Division does not appear to have made an inordinate effort to collect small amounts of tax as it presumably would do if it wished to harass the individuals in question." The report goes on to show that the Collection Division brought in only $100,000 in over 3 years of operation. With 16,000 entries in its files, collections averaged $6.20 per person or corporation. Not political? Tom Huston's White House Memorandum dated September 21, 1970, to H.R. Haldeman, indicated the use to which the SSS could be put. "What we cannot do in a courtroom via criminal prosecutions to curtail the activities of some of these groups, IRS could do by administrative action. Moreover, valuable intelligence-type information could be turned up by IRS as a result of their field audits."

An Internal Revenue Dispatch from the Regional Commissioner, North-Atlantic regions, to All Directors and dated December 18, 1972, spoke gleefully of the SSS as a weapon. "Although some of the files are top secret, Special Services Staff members with this clearance can extract data of this nature if needed. [Signed: John J. Flynn]" Some of the groups to be investigated were"....."Nonviolent groups who by alleged peaceful demonstrations oftentimes deliberately initiate violence and destruction.......Those who organize and attend rock festivals....." Further Flynn stated: "The magnitude and potential of this facility is unlimited." (We have not heard the last of this sprightly little crew.)

One church--the Church of Scientology--took on the IRS by sending out surveys to other churches to find out whether they were being harassed, and the reply list grew alarmingly. Dr. Billy James Hargis, founder of Christian Crusade, had his tax-exempt status revoked in 1966 on grounds that the Crusade supported the Becker Amendment (prayer and Bible reading in the schools). He appealed and the judge ruled against the IRS for unlawful discrimination and harassment. Said Hargis in an interview for Freedom: "We feel that the IRS has become the executioner for the Administration in power. In my opinion, the IRS represents a greater threat to freedom under law, because of its coercive power, than any agency of the Government, and the Congress should certainly reassess its activities." Other churches experiencing IRS harassment include the Mormon Church and its welfare programs. If the IRS destroyed the Mormon's $75 million in welfare assistance it would cost the American taxpayers more than $500 million a year, as the program makes workers out of the recipients and thus they become productive members of society. The Catholic Church is losing a school a day. It is not allowed to take deductions for its parochial schools under the IRS determination that there are already plenty of public schools--the latter, incidentally, show a decline in teaching competence as compared to private schools. This loss of private schools could cost the U.S. billions of dollars. Yet the IRS has given tax-exempt status to the American Nazi party.

The entire SSS operation could have cost in the neighborhood of several millions of dollars. The IRS spent millions of dollars in collecting piddling sums from "tax protestors" who refused to pay their phone tax because of the Vietnam War. Most of the accounts amounted to $10 or less. One protester owed $2 and 2 agents were sent out to collect the $2 or impound his car. He had no money and the car in front of his house was towed away. The car was not his. It cost the real owner $78 to retrieve it, with no IRS apology for the error forthcoming.

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