A School Case To Watch - 2008-02-08
A memo memorializing the agreement, which was secret, was later published by the Wall Street Journal, igniting a tumult. The Sklars, Mr. Gerstein reports, took similar deductions for religious education on their returns for the early 1990s, without challenge by the IRS, until 1994, when the IRS began rejecting their deductions. One of the questions being battled over in federal court now is whether the IRS has to disclose its secret agreement with the Scientologists and whether it sets a precedent in respect of others who wish to deduct tuition and other payments for religious education.
It's always dangerous for a newspaper to predict the outcome of a court case, but at one point, Mr. Gerstein reports, Judge Kim Wardlaw put it this way: "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?" A hapless lawyer for the IRS tried to argue that's not what she was saying. Snapped two judges from the bench: "That's the bottom line." Added Judge Wardlaw: "This does intrude into the Establishment Clause."
At one point, the IRS lawyer actually warned the court that the tax collector would have difficulty resolving tax disputes if the IRS were forced to disclose its secret agreement with the Scientologists. "Every person who can find out about it from any other religious group is going to come in and want the same thing and that would really tie the IRS's hands," she said. She went on to argue that the idea that the IRS can't settle and keep the settlement confidential could lead to members of racial minorities trying to claim that taxpayers of other races got better deals. This prompted the lawyer for the Sklars to ask: "If the IRS were saying white people were entitled to a certain deduction and black people were not, why would it be such a parade of horrors for the courts to come in and say the government may not act that way?"