« AnteriorContinuar »
all admitted by Les Branding the agent assigned to the audit of Synanon, during deposition under oath on May 5, 1983:
(1) In November, 1979, Agent Brandin submitted
(4) Agent Brandin and his Group Manager, Les
At the end of his audit in March, 1980,
(7) Brandin's Revenue Agent Report stated that
On June 25, 1980, Bob Chui replaced Les Brandin as the
On November 1, 1980, the Internal Revenue Service made a
On May 19, 1982, over three years after the fourth audit
Synanon Pursues. Its Legal Remedies
Syna non filed a lawsuit for declaratory action, pursuant to section 7428 of Federal Rules of ciyil Procedure, against the Internal Revenue Service on August 16, 1982 to preserve our constitutional rights of freedom of religion.
This lawsuit was filed because the Internal Revenue Service refused to treat Synanon as a religion and a church, and because of our belief that the Internal Revenue Service has selectively enfor ced the law to discriminate against Synanon and thus has endangered the continuation of Synanon's important religious and charitable works.
Synanon has been denied the opportunity to fairly litigate this lawsuit on its merits. Prom the date of filing our complaint to the present, Synanon has been denied discovery of facts essential to meet the burden of proving these charges against the Internal Revenue Service. For example, Synanon has not been permitted to take the depositions of any employees of the Internal Revenue Service, with the exception of one day's de position of Agent Brandin. Furthermore, the Department of Justice has subpoena ed and secreted away documents which Synanon has not been permitted to review. The Department of Justice has commingled civil and criminal investigations of Synanon -- an impermissible tactic -- in order to gain an unfair advantage over Synanon and to prevent Synanon from litigating its action against the I.R. S.
In March, 1983, the Government filed its first Motion to
At the end of 1983, the Government filed its second Motion for Summary Judgment and Motion to Di smiss the action. The Government alleged that Synanon had engaged in a corporate policy of violence seven years ago and had systematically destroyed documents. Synanon denied the truth of these allegations and has never had the opportunity to litigate
fully these issues before the federal court. On February 9, 1984, Judge Richey granted the Government's Motion to Di sm188; thus, Synanon's complaint against the Internal Revenue Service was di smissed. Synanon has appeal ed this decision.
The $55. Million Tax Bill
The legislative intent of section 7428 of the Federal
I.R. S. recognition of tax-exempt status to the courts prior to · being forced to pay its taxes. Synanon's action for
declaratory relief against the I.R, S. has not been decided on the merits. Therefore, all appeals should be exhausted before the injunctive-like authority of section 7428 is dissolved.
On Monday, February 13, 1984, four days after Judge Richey's decision and even before Synanon had an opportunity to prepare and file the Notice of Appeal, the Internal Revenue Service delivered to The Synanon Church a series of tax bills totalling $55 million for years 1977-1983. In March, 1983 Judge Richey had issued an opinion that his Court lacked jurisdiction to grant declaratory relief under 26 USC section 7428 for years after fiscal 1978 because there was no final adver se determination for those years. The I.R. s. had revoked Synanon's exemption for years 1977 and 1978 only. There was no determination for years 1979-1983. Despite this, the $55 million tax bill was for years 1979-1983.
To meet this demand, The Synanon Church would have had to turn over its entire gross revenues for the next twelve years without incurring a single expense. Synanon's revenues in the year ending August 31, 1981 were approximately $4.9 million. For the year 1982, the total was $4.6 million, and, in 1983, it was $4 million. These figures total $13.5 million for the past three years and are the gross revenues of Synanon. They do not include any expenses of any kind or payments for any obligations.
The haste with which the Internal Revenue Service prepared these tax bills became immediately evident when accountants reviewed the bills and found a $10 million computational error in the assessment of interest. Ten million dollars may not be much to the Internal Revenue Service, but it is a tremendous amount to the people of Synanon!
In June, 1984, the I.R.S. presented Synanon with a revised tax bill totalling $3.9 million. This bill is $51.1 million less than the original bill "Computational errors" of such overwhelming magnitude demonstrate the malice of the I.R. S. toward Synanon.
On February 13, 1984, upon serving the tax bill, the I. R. S. impounded Synanon's bank accounts, seizing Synanon's available ca sh. In addition, the I.R.S. placed liens on Synanon's properties in California. These actions were widely publicized, had a negative effect on Synanon's ability to do business and created tremendous fear and insecurity among Synanon's residents.
within one week, representatives of Synanon met with I.R.S. agents at Syna non's community in Badger, California to discuss the effects of the seizure of Sy nanon's funds, the liens on our property and the $55 million tax bill. The I.R.S. agents subsequently agreed to return the cash to Syna non and to not collect taxes until Synanon's appe als had been exhausted.
Two weeks later, the I.R.S. presented Synanon with a bill for
approximately $750,000 for social security taxes. Furthermore, the I.R. S. demanded explanations for all current and future expenditures of Synanon, thus assuming power to control Synanon's budget. The I.R. s. has agreed to stay collection of any PICA taxes until there has been a resolution of the lawsuit filed by Synanon on the FICA taxes.
The unpredictability of the I.R.S.'s actions proves their earlier assurances meaningless and reveals the true. intent of the I. R. S., which is not to collect taxes but to render Synanon incapable of future operation. On March 16, 1984, The Synanon Church sent a letter, pur suant to I.R.C. section 7429, to the Secretary of the Treasury, Donald T. Regan, requesting administrative review of the jeopardy assessment made against The Synanon Church. The eighteen-page letter sets for th evidence of the unreasonable and unjustifiable jeopardy assessment which discriminates against and injures The Synanon Church. The letter further specifies how the law requires immediate abatement of this assessment.
Onless the I.R.S. stays all attempts to collect taxes until the issue of Synanon's tax exemption is ultimately decided in higher courts, Synanon and the Government will be forced to expend enormous amounts of money and energy litigating separate issues such as jeopardy, amount of assessment and refunds for all years in question. Also, it would be wise to await the decisions of the higher courts on issues which would only have to be relitigated for each year after 1978. Synanon has the choice of closing its doors or allowing several auditors to again come to Synanon and conduct an audit. Paced with this alternative, Synanon has consented to an audit which we believe is improper and has agreed to pay taxes under protest while our lawsuit is pending. We have repeatedly tried to get the I. R. S. to follow procedures for an audit of a church, and they have repeatedly refused to do 80.
18 This What, was Supposed to Bappen in 1984,2
The present approach by the I.R.S. and Department of Justice could force Synanon to close its door 8. Over 550 people would be homeless. Many of these people are children, drug addicts, alcoholics, handicapped or senior citizens and those who are otherwise incapable of earning a living. Reason and rule of law will once again fall to prejudice, political expediency and ignorance.
Any beliefs, be they religious or philosophical, cannot be destroyed by a Government. They will either endure or not endure in the hearts and minds of the people who hold them. Only history bears witness to this. Unfortunately, there are hundreds of people in Synanon and many more throughout the country who are not in a position to wait for history to unfold.
We should mark 1984 not with a series of Orwellian nightmares, but move forward with compassion, courage and reason.
This is to request that the enclosed materials be included in the
Thank you very much.
G. M. Ross, Ph.D.