Scientology As A Business - L. Ron Hubbard and Scientology As A Business

L. Ron Hubbard and Scientology As A Business

Critics have claimed that L. Ron Hubbard, the founder of the Church of Scientology, decided to market the practice as a religion for practical reasons. Harlan Ellison reported being present when the idea for creating a new religion was first discussed: "Lester del Rey then said half-jokingly, 'What you really ought to do is create a religion because it will be tax-free,' and at that point everyone in the room started chiming in with ideas for this new religion. So the idea was a Gestalt that Ron caught on to and assimilated the details. He then wrote it up as 'Dianetics: A New Science of the Mind' and sold it to John W. Campbell, Jr., who published it in Astounding Science Fiction in 1950." Hubbard had a different origin story and stated that Dianetics had been researched during the years 1945-50 and it was initially presented as a science, however religious ideas were added into the book Science of Survival published in 1951. After the commercial failure of the Dianetics Foundation and disputes over the direction of the subject, Hubbard revisited the possibility of classifying his philosophical teachings as a religion. In a 1953 letter, Hubbard wrote that "the religion angle" seemed to make sense as "a matter practical business".

The Founding Church of Scientology of Washington, D.C. had obtained tax-exempt status in 1956 on the claim that it was "a corporation organized and operated exclusively for religious purposes, no part of the earnings of which inures to any individual". That status was revoked in 1958, on the grounds (as argued by the U.S. Department of Justice in subsequent proceedings) that the Church's "most extensive and significant activities are directed towards the earnings of substantial fees" and "the founder of the organisation L. Ron Hubbard remains in complete control and receives substantial remuneration and perquisites both from the taxpayer and a network of affiliates". The findings of fact in the case included that Hubbard had personally received over $108,000 ($600,000 in 2012 value) from the Church and affiliates over a four-year period, over and above the percentage of gross income (usually 10%) he received from Church-affiliated organizations. In addition, the Church had paid for Hubbard's car and for his personal residence, Mary Sue Hubbard had made over $10,000 renting property to the Church, and while the $3,242 paid to Hubbard's daughter Kay had been "generally designated as salary or wages", "the record is devoid of any evidence showing services performed by Miss Hubbard for ." The Court of Claims concluded "What emerges from these facts is the inference that the Hubbard family was entitled to make ready personal use of the corporate earnings." More recently the IRS granted religious recognition and full tax deductibility to the Church of Scientology in the USA in 1993.