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Scientology regained tax perk in $12m deal

The Times, 1 January 1998

[From chriso@lutefisk.demon.co.uk Mon Feb 1 17:43:00 GMT 1999]

BY Tunku Varadarajan in New York

THE Church of Scientology paid $12.5 million (7.8 million) to the federal Government in 1993 in a settlement with the Internal Revenue Service that secured tax-exempt status for the organisation, it was revealed here.

Details were reported for the first time in Tuesday's edition of The Wall Street Journal. Mark Rathbun, director of the Church's Religious Technology Centre, said yesterday: "The bottom line is, the document is a peace treaty. The war is over."

The dispute between the Scientologists and the IRS had lasted 26 years, after the main church was stripped of its tax-exempt status in 1967.

The Church, which was established in 1954 by the late L. Ron Hubbard, a controversial science fiction writer, had secured its tax-exempt status in 1957. But IRS concerns that the Church was using its status not for charitable purposes but to enrich Hubbard led to the ending of tax privileges ten years later.

A long series of lawsuits followed. Eventually, in 1993, the IRS sued for peace. Tax-exempt status was restored in exchange for a payment of $12.5 million, as well as the establishment by the Church of a special "church-tax compliance committee". The Church's assets total an estimated $300 million.

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