It looks as though the U.S. Supreme Court is going to have to step into another difficult church-state clash. This one involves finances and taxes. The various U.S. Courts of Appeal refuse to hand down uniform rulings on the controversy.
It involves the deductibility of payments made to the Church of Scientology by its members. The Internal Revenue Service refuses to recognize the payments as deductible charitable contributions. The IRS used to argue that Scientology was not purely a religious operation, but now it says that even acknowledging that it is a church, its unique way of financing its activities takes members' contributions outside the realm of voluntary gifts.
Essentially, a donation to a charity translates into a tax deduction only if the contribution is not part of a direct barter. You may enjoy church services more with a new organ, but that benefit is remote enough so that a donation to the organ fund is deductible. The money you pay for a new hymnal published by the church, however, is deemed not to be a charitable contribution.
There's very little leeway in figuring payments to the Church of Scientology. The church's individualized ritual sessions and attendance at its doctrinal courses are dependent on payment of a set fee. The more members pay, the more sessions they can attend, and there's even a kind of quantity discount for those paying for a large number of sessions well in advance.
That's a straight fee-service arrangement, not a truly voluntary contribution, the tax collectors said. In June, the U.S. Court of Appeals in Boston agreed, and on July 17, in Graham v. Commissioner, so did the appellate court in San Francisco. When a payment is intended to produce "a reciprocal and specific benefit to the donor," it's not a contribution "whether or not the benefit is religious," Judge Anthony M. Kennedy wrote.
But between those two rulings, on July 1, the U.S. Court of Appeals in St. Louis, with the same set of facts, came to the opposite conclusion. The reason for IRS scrutiny is to make sure that the tax deductibility of a contribution doesn't give a charity an unfair advantage in competing in a market with commercial sellers of similar goods and services, the judges noted.
Pointing to the "incongruity of attempting to place a market value on religious participation," Judge George G. Fagg ruled in Staples v. Commissioner that "an amount remitted to a qualified church with no return other than participation in strictly spiritual and doctrinal religious practices in a contribution." He warned that "spiritual gain to an individual church member cannot be valued by any measure known in the secular realm."
In other cases, courts ruled that:
The Secretary of Labor has no power to waive mine safety rules, even temporarily. A standard promulgated under the Federal Mine Safety & Health Act requires that air be pumped into underground coal mines through a separate tunnel. Some mine owners have asked for a rewrite of that rule, and while the matter is under consideration, the Labor Department told Kaiser Coal Corp. and Utah Power & Light that they could continue to operate without a separate air tunnel. Such "interim relief" from the standards is beyond the enforcers' authority, the U.S. Court of Appeals in Washington ruled. Judge Robert H. Bork noted that Congress had debated giving the labor secretary such authority and has rejected the idea, fearful that the "interim" could stretch out for years. UMW v. MSHA, July 10 A taxpayer can force the Internal Revenue Service to stop delaying. Four dairy farmers got into a hassle with the tax authorities over whether their books should be kept on a cash or accrual basis. After giving the IRS two extra yeares to pore over the books, the farmers refused additional extensions. The government presented them with a bill for unpaid taxes, and the farmers challenged the assessment in U.S. Tax Court. A later settlement was basically a victory for the farmers, and they then asked the Treasury to reimburse them for their lawyer bills.
Such reimbursement is available only in suits that follow all possible attempts to resolve a dispute administratively, and the IRS insisted that because the farmers refused the government additional extensions to study the books, they had gone to court too soon. But the Tax Court said that granting one two-year extension was enough and gave the farmers the maximum $25,000 toward the legal costs. Kennedy v. Commissioner, July 16 State antidiscrimination laws covering places of "public accommodation" force groups to offer services without bias, but not to accept them from whomever wants to help. In the first ruling on the issue in the country, the Connecticut Supreme Court finds nothing unlawful in the refusal of the Boy Scouts of America to let a woman be formally recognized as the scoutmaster of a troop. The Scouts are covered by the Connecticut sex discrimination statute, the Justices say, but that covers only a requirement that they let both males and females acquire their services. It leaves them free to discriminate in weighing bids to help out the group. Quinnipiac Council v. CHRO, July 7Moskowitz covers legal affairs for McGraw-Hill World News.