Australian tax review - great opportunity to get Scn examined

Neo

Silver Meritorious Patron
Charities and churches stand to lose billions in tax review

Charities and churches stand to lose billions in tax review - The Australian

http://www.theaustralian.news.com.au/story/0,25197,24086963-5013404,00.html

Adele Ferguson | July 28, 2008

CHARITIES and other non-government organisations could lose billions of dollars' worth of tax perks as the Rudd Government's taxation review prepares to examine whether the concessions offered to the $80 billion non-profit sector are justified.

The investigation, by Treasury boss Ken Henry, is expected to meet with resistance from some of the sector's most powerful groups.

Most of the country's religious groups, which make up about $25billion of the sector, run commercial enterprises. Among them is the Seventh Day Adventists' cereal giant Sanitarium, which generates more than $300 million a year.

Many of the operations have little to do with charitable work but are exempt from various taxes including corporate tax and capital gains tax. The Catholic Church has long opposed reforms such as the creation of a national charities commission to regulate the sector, or charging tax on commercial enterprises.

While any changes eventually recommended by Dr Henry may offer the opportunity to bolster Treasury's coffers, it will create a significant political challenge for Kevin Rudd, a devout Christian who has courted the religious vote.

Australian Industry Group head Heather Ridout, a member of the Henry review's committee, said the non-profit sector was a huge part of the economy and so it made sense to look at it as part of the review.

"The agenda is broad and so all types of entities will be looked at in this review," she said. "The non-profit sector is a very big and important part of this, particularly since we have had a lot of changes in welfare benefits and their interface with tax."

Business enterprises run by religious groups range from pizza chains, insurance companies, wineries, farms, schools, hospitals and aged-care facilities. All are exempt from tax. Australia is one of the few countries in the world where religious groups are not forced to pay tax on business ventures.

In the past few years, sports stars such as cricketers Shane Warne and Ricky Ponting and Formula One driver Mark Webber have set up charities to raisemoney under their own names. They receive various tax deductions.

The sector accounts for 8 per cent of GDP and employs more than 600,000 people, but a lack of transparency and poor accounting standards and corporate governance in the financial arrangements of many organisations has long been a concern.

In an era of heavy corporate regulation, most parts of the non-profit sector remain unregulated.

There is no process for the registration of charities, no consistent collection of information about the activities or funding sources of charities and there is little or no monitoring of the activities of charities.

This means that the Australian Government has no way of knowing how big the sector is, or how much Treasury forgoes in tax each year.

The tax review, and a simultaneous inquiry into the accountability and transparency in its use of public and government funds in the sector, by the Senate standing committee on economics, will now put these activities under the spotlight.

The Senate inquiry is currently accepting submissions into the disclosure regime for charities and not-for-profit organisations. Submissions close on August 29 with a report to be released in November.

World Vision head Tim Costello described the non-profit sector as in dire need of reform. "We don't have a single regulatory system or uniform accounting standards and so it makes it confusing for the public to know who to trust, or who is efficient," he said. "There are 700,000 not-for-profit organisations and the latest fad today is under-30s wanting to start their own not-for-profit equivalent of what in my day was starting a rock band.

"There are also a lot of celebrities and sports stars setting up charities in their own name or naming it after their child. These have a lot of overheads and it isn't fair on the ATO to have to regulate this.

"I would much prefer the Warren Buffett way, who decided to put his money in with Bill Gates. To me that is much more impressive than someone having their own name on a charity."

He also said with the growing number of charities raising money for similar things, it was becoming confusing to the public and there was a risk of "passion fatigue", particularly as petrol prices hit record highs and the economy gets tough.

Peter Shergold, the former secretary of the Department of the Prime Minister and Cabinet, who recently set up the new Centre for Social Impact at the University of NSW with initial funding of $12.5 million from the federal Government to educate the non-profit sector, said he welcomed any review. "There needs to be a review of the sector because it lacks transparency and the accounting standards need to be streamlined," he said.

"There are 700,000 organisations in the non-profit sector. It is too many. You have 2000 charities that have at least one of their goals tackling breast cancer. This is inefficient and so I think the idea of a charities commission should be explored.

"I feel positive about a standard regulatory regime."

Dr Shergold said some organisations received a lot of money from governments in the form of grants and subsidies and yet there was a lack of transparency.

"We need to look at taxation for charities - who does and doesn't get the gift recipient status," he said.
 

Dulloldfart

Squirrel Extraordinaire
Charities and churches stand to lose billions in tax review - The Australian

http://www.theaustralian.news.com.au/story/0,25197,24086963-5013404,00.html

Adele Ferguson | July 28, 2008

...

"There is no process for the registration of charities, no consistent collection of information about the activities or funding sources of charities and there is little or no monitoring of the activities of charities."

Is that so? So the "Church of Scientology Religious Education College Inc", which is registered in Australia as a charity but is the umbrella under which all the UK orgs operate, is based on, well, nothing that has been substantiated?

Hmmm.

Paul
 

asagai

Patron Meritorious
Is that so? So the "Church of Scientology Religious Education College Inc", which is registered in Australia as a charity but is the umbrella under which all the UK orgs operate, is based on, well, nothing that has been substantiated?

Hmmm.

Paul

I wonder if HMRC, in the UK, know this?
 

asagai

Patron Meritorious
Since UK charitable status is often dependent on reciprocity with Aus practices, you would think they would :)

Hopefully this results in real change.

Zinj

I'm sure you know this, but CofS doesn't have charitable staus in the UK it was denied this status by the charities commission
http://www.charity-commission.gov.uk/Library/registration/pdfs/cosfulldoc.pdf

In the UK, CofS operates under the Australian charity COSRECI as far as taxation and employment goes. Where, from this report apparently there is "no process for the registration of charities".
 

DavidM

Patron with Honors
The Australian Federal Government is commencing a review of non-profits and their tax status. This is a huge opportunity for us to get Scientology examined in Australia. We need to send information to the Treasury boss, Ken Henry, as well as submissions to the senate inquiry which is happening at the same time.

The tax review, and a simultaneous inquiry into the accountability and transparency in its use of public and government funds in the sector, by the Senate standing committee on economics, will now put these activities under the spotlight.

The Senate inquiry is currently accepting submissions into the disclosure regime for charities and not-for-profit organisations. Submissions close on August 29 with a report to be released in November.

If anyone can assist with tip-offs, information or testimony about Scientology's Australian finances, Aussie anons would appreciate it greatly. Please get in touch with any Aussies you trust, or directly - Treasury contacts below.

Newspaper report about the tax review:
http://www.theaustralian.news.com.au/story/0,25197,24086963-5013404,00.html

Thread in the media forum:
http://www.forum.exscn.net/showthread.php?t=6903

Treasury Contacts page:
http://www.treasury.gov.au/content/contacts.asp?ContentID=326&titl=Contact Treasury&ContentID=335
 

Neo

Silver Meritorious Patron
Thanks for the information about the Senate inquiry


Some more data

http://www.probonoaustralia.com.au/news/detail.chtml?filename_num=222982

Background Guide to Senate Inquiry into Charities
Posted: 28-07-2008
The Senate Economics Committee has released a Background Paper for the Charities Inquiry - outlining some of the issues around governance and disclosure regimes in the Not for Profit sector.

The Senate Committee says the Paper is intended to provide guidance to individuals or organisations considering making a submission to the inquiry on the types of questions and issues that the inquiry is likely to grapple with.

It says a number of concerns have been express about the way in which the Not for Profit sector operates in Australia. These include:
- a lack of transparency about the way in which public or donated funds are spent; and
- lack of accountability, despite the fact that the not-for-profit sector is a major
provider of services to the public.

The Paper sites a survey conducted by Choice Magazine which found that 81% of respondents did not know what proportion of their charitable donation reached their favoured charity's beneficiaries, yet 94% considered it important to have access to that information. The survey found wide variability and inconsistency in the way that charities communicate key information to donors. In some cases, such information was not publicly available at all, as some charities did not publish their annual reports or financial accounts.
Other issues include calls for regulatory reform including a national regulator.

The Paper looks at a proposal for simplifying Not for Profit entities by former Democrat Senator Andrew Murray.

He proposed that consideration be given to establishing a simplified regulatory framework to apply to both Not for Profit entities, including charities, and small for-profit businesses, with the regime to be administered by a Registrar of Incorporated Organisations.

The Senate Committee says it is not its intention to limit the inquiry to just the issues that are raised in the Background Paper and welcomes any submissions that address the terms of reference.

Submissions will close on 29 August 2008. The Senate Inquiry is due to report its findings and recommendations at the end of November 2008.

SENATE STANDING COMMITTEE ON ECONOMICS

INQUIRY INTO THE DISCLOSURE REGIMES FOR CHARITIES AND
NOT-FOR-PROFIT ORGANISATIONS

BACKGROUND PAPER

PDF file can be downloaded here
http://www.aph.gov.au/senate/committee/economics_ctte/charities_08/backgroundpaper.pdf
 

Neo

Silver Meritorious Patron
This data is a little bit old now, but interesting given the mention of COSRECI in the previous posts, and that organisations links and relevance to the upcoming Senate Inquiry here in Australia.

http://www.suburbia.net/~fun/scn/orgs/adel/cosreci.txt

I've now had a look at the files for two of the four Scientology
entities currently active in England and one which is now defunct. The
picture presented is, frankly, rather confusing (probably intentionally
so if Scientology's conduct towards the IRS in the US is in any way
typical). It's also produced some real surprises in the case of
COSRECI, the Australian corporation which runs Saint Hill Manor - and,
as we shall see, much else besides.

I'm no accountant, so please forgive any errors I may have made. I'll
scan the relevant documents and put them online within the next few days
- that way, people more knowledgeable than I can have a look at them
too.

========================================================================
Church of Scientology (England & Wales)

This was established on 31 July 1996 by a trio familiar to UK SPs -
Graeme Wilson, Greg Ryerson and Rachel Ryerson, all senior OSA members
at Saint Hill. It was established in East Grinstead, though its address
is not Saint Hill Manor as one might have expected - instead, it
operates from Scientology UK's solicitors' offices. It has produced one
annual return so far (for 1996-97, dated 08/08/97) but has produced no
accounts and appears neither have any assets, nor to have handled any
money.

The clue to its status is given in the initial statement of
incorporation, in which COS (E&W) is constantly and rather
optimistically referred to as "The Charity". This, evidently, is the
body for which Scientology is attempting to gain charitable status from
the Charity Commissioners; they submitted an application to this end in
December 1996 and I understand the review is still ongoing, no doubt
slowed by the considerable quantity of counter-submissions (hehehe).
But at the moment it owns nothing and does nothing. Presumably the plan
is for this body to gain charitable status and then to offload all the
UK assets and orgs into COS (E&W).

========================================================================
Church of Scientology of the United Kingdom

A bit of a puzzle, this one. It was incorporated on 25 June 1980 by
Peter Morgan, Alistair Gray and Judith Grey. Its corporate address is
given as 68 Tottenham Court Road (the London org) and its purpose,
rather dubiously, is given as being the use of the chapel at Saint Hill
Manor for "worship of the Supreme Being" (Hubbard, maybe!). The
veracity of this claim can perhaps be judged by the fact that when
Stewart Lamont, the BBC's Religious Affairs Correspondent, visited the
chapel in 1985 while he was researching his book "Religion, Inc.", he
found the pews covered in thick and undisturbed dust.

The puzzle deepens somewhat when one looks to see what COS of UK
actually did. It is not recorded as having had any capital, assets,
income or business dealings. In 1985 it was declared dormant (there's a
legal definition of this, apparently). In 1988, 1989 and 1990 it
declared that it did not have to have its accounts audited - this is
apparently legal in the case of a dormant company. In 1991, the last
AGM voted that no further AGMs would be held, nor further accounts or
returns submitted. The entity was finally struck off the register of
companies on 25 July 1995 - there are no records of any requests for
this, so I assume it was done by Companies House after COS of UK failed
to produce any more returns.

There's no trace of any accounts between 1980 (incorporation) and 1985
(the beginning of dormancy), which is very odd. COS of UK appears to
have owned nothing, received nothing and sold nothing. What was it for?
My guess is that it was an abortive attempt to create a UK-based entity
for Scientology, along the lines of COS (E&W). The dates of its
incorporation and dissolution are perhaps significant. It was
incorporated shortly after the repeal of the 1968-80 ban on foreign
Scientologists entering the UK and was dissolved almost exactly a year
before the incorporation of COS (E&W).

========================================================================
Church of Scientology Religious Education College Inc. (COSRECI)

This is the big one: an Australian-based corporation which runs Saint
Hill Manor and apparently, much to my surprise, much else as well. It
was established on 21 December 1976 in Adelaide, but operates *only* in
the UK. This is highly significant, as it turns out that COSRECI is
exempted from taxation in Australia - presumably because Scientology is
recognised there as a bona fide religion and has been since the mid-
1970s (notice the coincidence of dates). And this apparently enables
COSRECI to avoid paying UK tax; its tax liabilities are given in its
accounts as nil. This particular Scientology organisation, therefore,
is de facto tax exempt. It's almost certainly no coincidence that it
operates only in this country, as presumably UK-Australian tax law
enables it to escape taxation in either country.

So why is Scientology seeking charitable status if it is already
effectively tax-exempt? Charities have a number of privileges denied to
limited companies, though obviously the rules of their operation are
somewhat tighter. But the big advantage of charitable status for
Scientology would be political: it would gain "respectability" and, by
receiving tax exemption from the British authorities, its goal of
gaining the same on continental Europe would also be advanced. I
suspect that charitable status in Britain might also confer advantages
within the EU. Have any EU states given Scientology tax privileges or
charitable status?

PROPERTY
--------

It's no surprise, then, to find that COSRECI not only owns Saint Hill
Manor but much else besides, including property elsewhere in West Sussex
and the orgs at 68 Tottenham Court Road, London; 258-260 Deansgate,
Manchester; and 41 Ebrington Street, Plymouth. Remarkably, these have
all been mortgaged (on 19 February 1987 and again on 18 January 1988)
for no less than US $4,645,000. The mortgagees are the International
Scientology Religious Trust - of which I've never heard, and I can find
no record - which is based at Messrs. Whitman & Ransom, 11 Waterloo
Place, London SW1. Sounds like a law or accountancy practice; I'll
check it out. The trustees of the ISRT are given as Carl Heldt (any
relation to Henning Heldt, the GO criminal?), Maureen Brigatti and Tom
Woodruff.

More extraordinary still, Saint Hill Manor and 68 Tottenham Court Road
had been mortgaged earlier, on 7 January 1982, to secure £1,550,000 (the
Manor) and £320,000 (68 TCR). The mortgagee was Church of Scientology
of California (CSC) - which had been dissolved on 31 December 1981. How
could CSC possibly have been the creditor in this mortgage if it no
longer existed?

ACCOUNTING
----------

Strange financial dealings aside, COSRECI's income and expenditure
statements reveal an interesting picture. The organisation seems to be
a little sloppy in filing its accounts. I found none for the period
1976-81; COSRECI was in fact sent a warning dated 9 September 1980
telling it to submit its accounts forthwith. This it apparently didn't
do until 1984 (!), and even then appears to have provided only a
"Statement of Affairs at 13 December 1982" with no figures of income or
expenditure. Likewise, its 1984 accounts were not filed until 1987.

I'm somewhat at a loss to explain this pattern, particularly as it's
also visible for Narconon - the only Scientology entity to have been
given charitable status - which has not filed any accounts since 1994,
despite its very active status (trying in 1996 to buy a mansion in
Yorkshire for £175,000, but failing after being gazumped by the locals).
What advantage could Scientology gain if it was deliberately delaying
its returns to a point where it could cause serious trouble? I'm
inclined to think that it's simply a product of sloppy management,
though I recall that Sir John Foster's 1970 report ("Enquiry into the
Practices and Effects of Scientology" - see http://www.demon.net/castle/
audit/) also cited a large number of instances where Scientology
entities had failed to file statements of accounts.

There are no filed accounts for 1989, 1990, 1991 or 1992 (though the
figures from the latter are given on the 1993 accounts for comparison).
I suspect that the accounts *have* been submitted but, for whatever
reason, have not made their way onto the Companies House files. I'll
check this point at a later date.

SUBSIDIARIES
------------

COSRECI's records also reveal the existence of two subsidiary
companies: Nesta Investments Ltd and S.O.R. [Sea Org Reserves]
Management Ltd, which was liquidated in December 1988. Its purpose was
described, rather opaquely, as "provision of administrative and
financial services for overseas organisations". A very similar new
entity was "acquired" in 1993 - SOR Services (UK) Ltd, whose role is
described as "provi[sion] of bookkeeping services". Both of these
bodies (and COSRECI itself) are mentioned in the secret IRS-Scientology
agreement of 1993, which requires them to "operate in a manner that does
not jeopardize the tax-exempt status of any Scientology-related entity
so recognized." The incorporation date of SOR Services (UK) Ltd is so
close to that of the IRS-Scientology agreement that coincidence seems
improbable.

For 1983 through to the last year of accounts, 1995, Nesta has held
180,000 £1 ordinary and 3 "non-cumulative preference" £1 shares in
COSRECI. The old SOR, which the 1985 accounts disingenously claim was
"acquired 12 November 1985", held 100 £1 ordinary shares, while the new
1993 version has 1000 of the same. And that is as much detail as is
given. The accounts declare:

"The College financial statements do not include the results of
the subsidiary companies as the Trustees do not consider that the
additional expense involved in the preparation of consolidated
accounts would be of any benefit to the members."

Yeah, right. I think I'll investigate Nesta and SOR a little further.
But there's no evidence of large-scale cash flows between COSRECI, Nesta
and SOR: the amounts passing between them haven't exceeded £11,000.
It's hard to imagine what the purpose of Nesta and SOR could be; it may
be just about possible to imagine SOR as an accountancy service of
sorts, but what advantage could COSRECI gain from Nesta holding 180,000
of its 181,000 shares? And who controls those shares?

CASHFLOWS
---------

COSRECI's statements of income and expenditure reveal a steady growth
in income since 1982 (all figures are in UK pounds; to convert
approximately to dollars, multiply by 1.6):

INCOME:
1982: 1,409,990
1983: 2,956,999
1984: 2,630,541
1985: 1,932,796
1986: 2,781,407
1987: 3,036,181
1988: 5,262,466
1989: ?
1990: ?
1991: ?
1992: 4,935,704
1993: 5,026,035
1994: 6,015,363
1995: 5,678,380

There's no explanation of why there should have been a 52% jump in
income between 1982 and 1983, nor an equally remarkable 42% jump between
1987 and 1988; the accounts state that no breakdown in income by
geographical region will be given. (This statement, incidentally,
acknowledges COSRECI's direct ownership of regional orgs. Presumably it
owns missions such as Newcastle, Sunderland and Hartlepool, of which I
have found no trace as independent entities). The anomalously low level
of income in 1982 may be related to the mass purges and defections of
that year, which accompanied David Miscavige's takeover of Scientology.

It's also noteworthy that COSRECI's income has increased by a mere 8%
between 1988 and 1995, compared to a 42% increase between 1982 and 1988.
Must try harder! I wonder if this marked slowdown might have been a
factor behind the recent steep rises in Scientology's so-called "fixed
donations". Maybe they were an attempt to get the income stat rising
again.

The expenditure figures are likewise interesting, showing that COSRECI
has frequently spent far more than it has earned - in the process
racking up huge deficits:

EXPENDITURE:
1982: 2,767,995
1983: 2,750,005
1984: 3,973,042
1985: 2,332,860
1986: 3,318,111
1987: 2,147,901
1988: 4,717,092
1989: ?
1990: ?
1991: ?
1992: 6,661,193
1993: 4,840,122
1994: 5,523,557
1995: 5,012,722

SURPLUSES/DEFICITS FOR FINANCIAL PERIOD:
1982: -1,284,687
1983: -189,048
1984: -1,833,815
1985: 83,054
1986: 869,146
1987: 635,532
1988: 206,880
1989: ?
1990: ?
1991: ?
1992: -1,886,418
1993: 33,497
1994: 328,641
1995: 529,949

I found exactly the same sort of pattern in the records of Narconon,
held separately at the Charity Commission. Not a coincidence, I'm sure.
The Narconon records did not state where the money was going, but those
of COSRECI do, in broad terms:

AMOUNTS DUE TO ASSOCIATED CHURCHES:
1982: 3,215,983
1983: 2,286,608
1984: 2,030,051
1985: 3,271,398
1986: 6,157,295
1987: 3,135,009
1988: 4,338,779
1989: ?
1990: ?
1991: ?
1992: 8,809,208
1993: 9,256,214
1994: 9,292,317
1995: 9,390,808

This is almost certainly money going (eventually) to the RTC, the body
headed by David Miscavige which licenses the use of Scientology
trademarks and materials - for a hefty fee. It is noteworthy that the
Narconon accounts show exactly the same pattern in what are referred to
by Narconon as "payments to creditors". The payments remain at a
relatively steady level for most of the 1980s, apart from a peak, but
then escalate massively in the early 1990s. Narconon's last accounts
(1994 - very naughty indeed) show it to be running a large and growing
deficit.

It's also noteworthy that the amounts paid to "associated churches"
appear to have little relation to the actual amount of income generated
by COSRECI. For example, between 1982 and 1988, COSRECI income rose by
42% while payments to "associated churches" rose 25%. But between 1988
and 1995, COSRECI income rose only 8% while payments to "associated
churches" rose by a whacking 116%; the amount to be paid in 1995 was 40%
higher than the entire yearly income of COSRECI. In other words,
COSRECI is paying massively more to its parasitic "sister churches"
whilst doing only a small amount of extra business. The huge growth of
these payments may well be related to the slowdown in growth - might an
RTC "dash for cash" be crippling even flagship orgs like Saint Hill?

You will have noticed that despite the huge sums being paid to
"associated churches", COSRECI nonetheless has managed to post surpluses
of upwards of £500,000 in the latter period of its accounts. Its
surpluses and deficits have been significantly influenced by its
interest receivable and payable:

INTEREST RECEIVABLE:
1982: 74,938
1983: 11,507
1984: 2,861
1985: 925,677
1986: 10,165
1987: 9,639
1988: 4,379
1989: ?
1990: ?
1991: ?
1992: 9,355
1993: 12,572
1994: 35,580
1995: 11,929

The remarkable 1985 figure is unexplained. The payable interest
figures are more explicable, relating to "bank overdrafts and other
loans" payable either "within 5 years, other than by instalments" or
"within 5 years by instalments". Most of the money payable falls into
the first category.

INTEREST PAYABLE:

1982: 1,620
1983: 407,549
1984: 494,175
1985: 442,559
1986: 342,607
1987: 264,677
1988: 348,133
1989: ?
1990: ?
1991: ?
1992: 165,308
1993: 161,771
1994: 175,737
1995: 171,289

This suggests that a lot of borrowing occured in 1983, the debt since
being progressively reduced.

The later figures also give the average number of employees of COSRECI
and their wage bill, as follows:

NUMBER OF EMPLOYEES AND WAGE BILLS:
1992: 453 £614,726
1993: 444 £596,492
1994: 445 £850,452
1995: 428 £667,826

The average wages per employee are incredibly low, but seem to have
increased somewhat in the long term:

AVERAGE WAGES PER EMPLOYEE (per week):
1992: £26.09
1993: £21.50
1994: £36.75
1995: £30.00

No wonder the London org advertises for new members with the oh-so-
enticing slogan "Low Pay, High Prospects". The near-70% pay rise in
1994 may have been a belated recognition that the average salaries were
worth considerably less than state unemployment benefit. Incidentally,
if high inflation has forced Scientology to increase the cost of
services twice by a cumulative 10% at the end of last year, how come
it's apparently not affected wages? It looks like the real value of the
wages is actually falling, which suggests that (in this respect at
least) inflation is *helping* Scientology - though not its unfortunate
employees.

A thought occurs to me: a while back, someone posted a timetable of
duties at Saint Hill which I think showed a 15 or 17 hour day, or
something equally ridiculous. If, let's say, Saint Hill staff have to
work 15 hours a day, that means that on the 1995 figures they would be
earning a mere *40 pence* an hour - and that's only if they were on a
5-day week. If it's every day of the week, that figure falls to only 28
pence per hour. I don't know whether COSRECI and Scientology in general
will be affected by the proposed national minimum wage, but if that is
set at around £3.00 an hour - the figure most mentioned by the press -
that will have a massive effect on Scientology's pitiful wages bill. In
most firms, the bulk of the expenditure - maybe 70-80%, I believe - goes
on the employees' payroll. For Scientology, the figure is only 12.5%.
That says a lot about how Scientology treats its workers.

I hope to have the documents scanned by the start of next week. Look
out for them on the Web - I'd love to see what the ARSCC Finance
Committee makes of them.
 

Nurse Pinch

Patron with Honors
Interesting data above. Its quite clever how the Cult has mortgaged its property to itself. The reason you would do this is to protect yourself from lawsuits. You see if you own a house and I sue you, the court awards me your money and assets- I win. BUT, if you have a mortgage on the property, then the mortgagee gets paid what they are owed FIRST, and I get whatever is left over. This trick here is that if you have mortgaged the property to an entity that is "not you" (but IS you really, its just impossible to prove) and "not under your control" (but IS really, just impossible to prove), then you get all the money from the legal suit, because the mortgage has to get paid FIRST, and I just get the leftovers.
Pinchy.
 

Nurse Pinch

Patron with Honors
"What advantage could Scientology gain if it was deliberately delaying
its returns to a point where it could cause serious trouble?"

Why pay the tax, when your intention is to gain charitable/tax excempt status anyway? Chances are you wont get all those previously paid taxes back. Also, once your tax bill gets too huge, you can always cut a deal with the gov't saying you will drop your gazillion lawsuits against Inland Revenue (and hide the blackmail material you have on the chancellor of the exchequer) in return for a settlement of say 20p on the pound for your tax bill. It worked against the IRS.
Pinchy
 

Royal Prince Xenu

Trust the Psi Corps.
"What advantage could Scientology gain if it was deliberately delaying
its returns to a point where it could cause serious trouble?"

Why pay the tax, when your intention is to gain charitable/tax excempt status anyway? Chances are you wont get all those previously paid taxes back. Also, once your tax bill gets too huge, you can always cut a deal with the gov't saying you will drop your gazillion lawsuits against Inland Revenue (and hide the blackmail material you have on the chancellor of the exchequer) in return for a settlement of say 20p on the pound for your tax bill. It worked against the IRS.
Pinchy

Apart from the blackmail bit, that is the standard way for Big Business to avoid tax. They tie it up in Court for years until the relevant tax agency crumbles and accepts a ridiculously small payout just to make the issue go away.

And yes, Sanitarium would be a registered Company, and as I understand it, a Company MUST run at a profit or be deregistered. I cannot see how its operations could be disguised as "charity".
 
The real OT's

Which all goes to show that the real "OT's" are the CoS's highly paid "wog" tax attorneys, accountants, and "retired" IRS commissioners.

When you have the capital base ($$$) CoS has, there are all kinds of games to play if you know how. Witness the recent real estate acquisitions either sitting empty (while appreciating) or being charged back to the original "donors". All making money.

While tech delivery, in any meaningful way, has ceased. Why bother?

DM may be smart and ruthless, but he simply doesn't possess this kind of financial know-how. Loath as he is, he must have guidance.

Which brings us back to CST (Church of Spiritual Technology) and its "wog" board of directors. And possible threads higher up into the US government?

I've listened to Larry Brennan on this, and WHO controls the Scn conglomerate (ie. DM) but I dunno; his info may be outdated. I think that as DM becomes increasingly desperate under mounting attacks (OG and Anon) he becomes increasingly reliant on his "wog" overlords via CST.

Milking the prize cow before she dies.

Food for thought only,

JH
 

Dulloldfart

Squirrel Extraordinaire
Which brings us back to CST (Church of Spiritual Technology) and its "wog" board of directors. And possible threads higher up into the US government?

Speculate all you wish, but it is likely to be about as well-founded as that he gets orders telepathically from Alpha Draconis.

I have not seen one iota of evidence that he is not the source of his orders, from all the stories I have read from people who have worked with him right up to the past year or so. Stories here, OCMB, XSO etc.

Paul
 

asagai

Patron Meritorious
Which all goes to show that the real "OT's" are the CoS's highly paid "wog" tax attorneys, accountants, and "retired" IRS commissioners.

When you have the capital base ($$$) CoS has, there are all kinds of games to play if you know how. Witness the recent real estate acquisitions either sitting empty (while appreciating) or being charged back to the original "donors". All making money.

While tech delivery, in any meaningful way, has ceased. Why bother?

DM may be smart and ruthless, but he simply doesn't possess this kind of financial know-how. Loath as he is, he must have guidance.

Which brings us back to CST (Church of Spiritual Technology) and its "wog" board of directors. And possible threads higher up into the US government?

I've listened to Larry Brennan on this, and WHO controls the Scn conglomerate (ie. DM) but I dunno; his info may be outdated. I think that as DM becomes increasingly desperate under mounting attacks (OG and Anon) he becomes increasingly reliant on his "wog" overlords via CST.

Milking the prize cow before she dies.

Food for thought only,

JH

Good to see you here again JH! :thumbsup:

I'm not sure about the significance of the CST Board, but I do agree that the more the noose tightens around DMs neck, the more he has to rely on the advice from his non-scn advisors that what he is doing will enable him to escape criminal prosecution.

I think his bags will be packed for a quick getaway and his millions of dollars retirement fund will be out of reach of the authorities.

Let him go, I say! "what shall it profit a man ..." His fate is sealed and he is doomed to spend the rest of his life hiding like LRH did.
 

Neo

Silver Meritorious Patron
The Australian
Max Wallace
August 08, 2008

http://www.theaustralian.news.com.au/story/0,25197,24144988-7583,00.html


THE Treasury review of tax concessions offered to the $80billion non-profit sector marks a policy turning point that has been a long time coming. One of the most contentious concessions has been the tax-exempt status of commercial businesses run by religious organisations. This privilege is not conceded in many other comparable liberal democracies.

The questioning of this privilege has occurred sporadically in the past century. In 1905 the Catholic Church was running a commercial laundry at its convent in Sandy Bay, Hobart, an Australian Magdalene laundry. The local council argued that if it was running a business from this site, it should not be exempt from local council rates. The council's attempt to withdraw this privilege failed.

In 1930, Anne Lennon railed against the tax privileges of the churches on her soapbox in the Sydney Domain behind the NSW Parliament House. She was arrested, as the free speech laws we enjoy now were not so liberal then. The Rationalist Association of Australia appealed her case and lost.

On May 20, 1936, when the first federal Income Tax Assessments Act was being debated, the question of religious organisations running tax-exempt commercial businesses arose. Senator James Arkins said: "If there is anything in the allegation that such bodies are using the cloak of Christianity to make profits without paying taxation, it is about time that legislation was framed to check them." Nothing was done.

The issue went quiet for almost a half century before senator David Hamer asked on May 1, 1984, whether it would be practicable "to separate, for tax concession purposes, the charitable activities of a religious body from its other activities". Senator Peter Walsh replied, "I believe there would be considerable practical difficulty in separating the charitable activities of a religious body from other activities. Legally, the advancement of religion is a charitable activity."

This needs some explanation. The Statute of Elizabeth (I) of 1601 created four heads of charity: the relief of poverty; advancement of education; advancement of religion; other purposes beneficial to the community. Historically, monarchs and churches had usually been tax-exempt.

This statute opened up the field. Its reach, in terms of religion, was tested in the 1891 Privy Council Pemsel case in which the United Brethren sought to have tax exemption for its activities among heathen nations.

In a split decision, the council found the extension of Christianity to other cultures was a form of charity.

The question of the tax-exempt commercial income of religions arose again in the parliament on December15, 1992, when senator Bob McMullan said the Labor government was not too happy about the Seventh-Day Adventists' Sanitarium being tax-exempt, "but the attempt to disentangle that would be too difficult".

On September 23, 1997, federal Liberal member for Cook Stephen Mutch raised the case of the Little Pebble, a cult leader subsequently jailed for a sexual offence against a 15-year-old girl. This "chip off the block of St Peter" was well aware of his tax-exempt status and was using it to fund his activities.

All religious organisations that satisfy the legal definition of religion in Australia are tax-exempt. The Australian Taxation Office makes these determinations when organisations apply. The definition of religion in Australia was decided in the 1983 High Court Scientology case, in which the court defined religion as any belief in a supernatural being, thing or principle and canons of conduct that give effect to that belief. An organisation must have a building, be paying a stipend to a minister with a congregation, perform rituals and be open to the public.

Second, in Australia, under our charity law the dominant purpose of a religious organisation's activities must be the "advancement of religion". It does not matter if the religious organisation is running a commercial business, so long as the dominant purpose of the activity is religious.

This opens the door for any religious organisation to tithe its members, parlay the donations into a considerable sum, then invest it in a commercial business or investment whose profits will be tax-exempt. All things being equal, with tax-exempt status, a business can grow quickly. There is no requirement for any of these profits to be applied to the relief of poverty or any of the many other charitable causes because the advancement of religion, that 17th-century idea, is deemed to be charitable in itself. It does not matter what kind of religion it is, so long as it has a supernatural belief.

In the US, Republican senator Charles Grassley of Iowa is heading an investigation by the Senate finance committee into six televangelist ministries whose leaders openly flaunt their wealth. The question is whether this is an abuse of their tax-exempt status. Grassley remarked pithily: "Jesus came into the city on a simple donkey. What are disciples of his doing flying in (private) jets?"

In 2000, the Howard government set up the charities definitions inquiry. One of its recommendations was the creation of a charities commission to begin some oversight of this growing sector of the economy. The government refused to respond to its own inquiry's recommendation that a commission be established. Last year, New Zealand created a charities commission.

The Rudd Government is asking Treasury to question why disentangling the revenues of the commercial activities of religious organisations from their other revenues is too difficult. If other countries don't have that difficulty, then why does Australia?

*****************************

Max Wallace is director of the Australian National Secular Association and author of The Purple Economy: Supernatural Charities, Tax and the State.
 

DavidM

Patron with Honors
The first round of public submissions have been put up on the Treasury website, and it's good to see a couple of letters from concerned citizens detailing the abuse of tax-exempt status by the Church of Scientology. (Submissions by Graham Smithers, Hudson Carrad and Nick Renton mention Scientology)

The tax review is still going on and it will continue until December 2009. Submissions will still be accepted and considered throughout the review process. So if you haven't sent anything in, you still have time.

Privacy is a concern here because the submissions (and author details) are published on the treasury website. However, on the submissions page there is some info about maintaining privacy.

If you don't want your submission to be published, you can still send one in, just mark it as CONFIDENTIAL on the first page and at the top of your submission explain why you do not want your personal info released publicly (briefly explain Scientology's Fair Game policy).

The review makes its final report to Government in December 2009. So, while time has run out for us to consider further submission for the first consultation paper, we still welcome submissions at any time. Submissions will be taken into account over the course of the entire review.

Public posting and privacy

All submissions will be treated as public documents. Submissions will be published to this website after the period for submissions ends, including any personal information of authors.

Submissions Page

If you do not want your submission to be made public, please mark ‘Confidential’ clearly on the front page.

When sending your submission, please tell us if there are any parts that you do not want published.

If your submission contains the personal information of any third parties (including the names of individuals) we may decide not to publish those details, or may need to obtain the consent of those parties for publication. Please mark clearly on the cover of your submission if third parties have not consented to the publication of their information.

If you have any specific concerns about privacy, please indicate what they are at the top of your submission.

Where to send your submission

Send your submission electronically to the review secretariat at [email protected]

Submissions on computer disk or paper can be mailed to:

AFTS Secretariat
The Treasury
Langton Crescent
PARKES ACT 2600

More info about submissions:
http://taxreview.treasury.gov.au/content/Content.aspx?doc=html/submissions.htm

asyd discussions about this:
http://forum.asyd.org/index.php?topic=469.0
http://forum.asyd.org/index.php?topic=16.0
 

Anne Ominous

Patron with Honors
This is CRUCIALLY important guys! All you newly-freed ANZO kids can make a massive difference if you all contact the Treasury and tell them why Scientology must lose its tax exempt status.

Imagine them reading dozens of letters from people telling them exactly how they were tricked, deceived and abused, then discovering that this all happened within THE LAST YEAR.
 

Tim Skog

Silver Meritorious Patron
Which all goes to show that the real "OT's" are the CoS's highly paid "wog" tax attorneys, accountants, and "retired" IRS commissioners.

When you have the capital base ($$$) CoS has, there are all kinds of games to play if you know how. Witness the recent real estate acquisitions either sitting empty (while appreciating) or being charged back to the original "donors". All making money.

While tech delivery, in any meaningful way, has ceased. Why bother?

DM may be smart and ruthless, but he simply doesn't possess this kind of financial know-how. Loath as he is, he must have guidance.

Which brings us back to CST (Church of Spiritual Technology) and its "wog" board of directors. And possible threads higher up into the US government?

I've listened to Larry Brennan on this, and WHO controls the Scn conglomerate (ie. DM) but I dunno; his info may be outdated. I think that as DM becomes increasingly desperate under mounting attacks (OG and Anon) he becomes increasingly reliant on his "wog" overlords via CST.

Milking the prize cow before she dies.

Food for thought only,

JH

I think there is more than food for thought here. What happens to all the assets after the "cow is dead." We are talking about an awful lot of property that has to be worth millions (perhaps billions). DM may trot off with his cut but there is still a fortune to fall to the right person(s).
 
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