Disestablishing Scientology

I've mentioned in the past the bizarre situation where one particular religion enjoys a special tax status under U.S. law. People paying Scientology for their bogus training on the way to "Theta Clear" have been allowed to deduct these expenses as charitable contributions--even though they are clearly payment for services. There has been a case working its way up through the federal courts challenging this special treatment that Scientology gets. (Why? Probably because Scientology is the religion of Hollywood, and this special treatment decision was reached during the Clinton Administration.)

In this case, a couple named Sklar are arguing that Scientology is allowed to do this, then should be allowed to treat Jewish school tuition the same way. If the courts actually treat the Sklars' case the same way as Scientology, then they will effectively create a religious school tuition tax deduction. This article from the February 8, 2008 New York Sun tells what happened at the appellate court hearings:

During arguments on the case this week, three judges who ride the 9th Circuit Court of Appeals expressed deep skepticism of the IRS's position that the way the agency treats Scientologists is irrelevant to the deductions the Orthodox Jews, Michael and Marla Sklar, took for part of their children's day school tuition and for after-school classes in Jewish law.

"The view of the IRS is it can unconstitutionally violate the Constitution by establishing religion, by treating one religion more favorably than other religions in terms of what is allowed as deductions, and there can never be any judicial review of that?" Judge Kim Wardlaw asked at the court session Monday in Pasadena, Calif.

"That is not at all what I said," a Justice Department lawyer representing the IRS, Ellen Delsole, said.

"That's the bottom line," Judge Wardlaw and a colleague on the panel, Harry Pregerson, both replied. "This does intrude into the Establishment Clause," Judge Wardlaw added.

The case stems from an agreement the IRS reached with the Church of Scientology in 1993 to end more than a decade of lawsuits, audits, and other enforcement actions involving the tax agency, Scientology entities, and church leaders. The church paid $12.5 million, while the IRS agreed to drop arguments that Scientology, which was founded by L. Ron Hubbard, was not a bona fide religion.

This isn't as good for those who put their kids in private religious schools as a tuition tax credit (since it only reduces your adjusted gross income by the tuition amount, not the taxes you pay), but it would certainly create some real competition for public schools.

I happen to think that the right solution is to scrap Scientology's special treatment--not expand it. Something like this should come from a legislature--not imposed by the judiciary.