Judges skeptical of IRS’s Scientology policy
Posted by Ron Coleman on February 9, 2008
TaxProf Blog reports on a potentially huge case, wherein an orthodox Jewish couple is challenging the IRS’s policy of permitting tuition writeoffs for the Scientologists and no other religion — an utterly preposterous position. He quotes the New York Sun:
Our own view on school vouchers and the like is that the right place to work out a solution is in the legislatures. But one of the things the courts are made for is abuses of the state power, and it certainly is starting to look like there has been an enormous one if the Internal Revenue Service is denying Jews, or Christians, or any other religion, the right to make deductions for religious education it is permitting to another group on the grounds that it is a religion. So there is at least the possibility here that the riders of the 9th United States Circuit could simply order the IRS to grant the Sklars — and others similarly situationed — deductions for certain costs of religious education similar to what the government is secretly allowing the Scientologists. Or in other words, one could make a giant leap forward in parental choice in the education of children, all in one judicial fell swoop.
Why is the Sun so interested in a story from California? Not just because the holding in the Sklar case is of general interest. It’s very much a New York story. Catholic schools are not what they once were in New York, but yeshiva (generic term — not a reference to the university) tuition is one of the most severe, and divisive, issues in the American orthodox Jewish life. A decision in favor of the Sklars would have a profound effect on the ability of many tens of thousands of (large) orthodox Jewish families to make ends meet, unless it were rolled back by the legislature — which makes the procedural posture of this case interesting.
The Scientology writeoff policy, while it should have been enacted, if at all, legislatively, was evidently part of the IRS’s corrupt deal with that group in settlement of their ongoing legislation. If the Circuit Court were to rule its application to one “religion” unconstitutional, as it seems it must, then the IRS will (it also seems) either have to back out of the deal with the Scientologists, or apply this policy to all Americans — placing the burden on Congress, then, to affirmatively roll it back, which is a lot harder than not simply not enacting this policy long sought by religious and home-schooling groups.
Works for me. I like a world where Congress has to justify increased taxation (i.e., even if it is effective taxation rather than a new tax or a tax rate), rather than one in which we have to beg for it.