Working for the tax-saving weekend
Filing deadline for 2012 taxes -- and almost $1 billion in unclaimed tax refunds -- is April 18

Church of Scientology is still tax-exempt
Recent Internet reports to the contrary are fake

Opponents of Scientology were jazzed yesterday as word spread across the Internet that the controversial church's tax-exempt status had been revoked.

They were quickly disappointed.

Church_of_Scientology_building_Los_Angeles_Wikimedia-Commons_by-PictorialEvidenceChurch of Scientology "Big Blue" building in Los Angeles (Photo by PictorialEvidence via Wikimedia Commons)

The report that hit my social media feeds ostensibly was from ABC News. It said, in part:

In a unanimous decision by the Supreme Court today, the eight justices ruled in favor of revoking the Church of Scientology’s tax-exempt status in the United States. Under the ruling, Scientology will still be able to operate as a business but no longer as a non-profit religious organization.

The case was brought forward by the Internal Revenue Service Criminal Investigation Division after concluding a two-year-long investigation into the inner workings of Scientology. The investigation, along with an extensive audit, found the group to be a “criminal operation with a sole purpose of making money”. The eight justices agreed with the IRS and its findings that Scientology was neither a religion or fell under the guidelines of a non-profit charitable organization.

There were plenty of links to legitimate sites in story. And the comments by the anti-Scientology crowd on the article, as well as around the online world, were ecstatic.

Clues to questionable status: I generally am in favor of ending the tax-exempt status for many of the way too many tax-exempts out there, so I took a look at the story. A close look.

The ABC logo isn't quite right.

Other news on the site includes articles on Bill Murray's presidential run (how did I miss that one?), the revelation that Texas' junior U.S. senator is the Zodiac killer (OK, he's not the nicest guy, but really?) and some lewd details about Donald Trump's, uh, manliness (OMG, no, no, a million times no).

Not exactly the kind of stuff you'd expect to find on a Disney-owned property.

All that, along with the website's suffix and the fact that in all my daily attention to IRS issues I had not heard of this, I was convinced that the Scientology story was fake.

The expert hoax debunkers at Snopes added the final confirmation of what it cleverly called the Lyin' Tology articles.

Real European action: While there was no Supreme Court ruling against Scientology's U.S. tax status, the celebrity -filled church actually notched a legal victory in Europe last week.

Officials in Belgium had charged 11 members of the church and two affiliated bodies with fraud, extortion, the illegal practice of medicine, running a criminal enterprise and violating the right to privacy. Judge Yves Regimont, presiding at the Palace of Justice in Brussels, threw out the charges on March 11. 

"The entire proceedings are declared inadmissible for a serious and irremediable breach of the right to a fair trial," said Regimont. He also criticized the investigators for what he said was prejudice, and prosecutors for being vague in their case against the church.

My thanks to @brilliantsights for bringing this true Scientology legal report to my attention via Twitter after I originally posted this item.

Charitable tax lessons: This latest fake news item -- it happens a lot; a New York Times knock-off site recently reported a nonexistent Elizabeth Warren presidential endorsement -- provides two important lessons.

First, don't believe everything you read on the Internet. That's time-honored advice, offered by none other than Honest Abe himself. Or maybe not.

Dont believe everything you read on the Internet_Abe Lincoln

Second, check out the tax exempt status of nonprofits yourself, especially before you donate. If you want to claim any charitable gift as an itemized deduction, your donation must go to a group that passes IRS muster.

"Fortunately, a look at history shows that a nonprofit must engage in some truly egregious conduct to lose its 501(c)3 tax exemption," writes attorney Stephen Fishman for "Basically, it must act in such a way that it fails to carry out its exempt functions. For example, a nonprofit could lose its tax exemption by spending all of its time and resources running a for-profit business that's unrelated to the organization's exempt purposes or by diverting contributions, grants, and other income to personal use."

A group also could get in trouble for not filing the file the proper IRS paperwork. Uncle Sam automatically revokes an organization's exempt status if they fail to file for three consecutive years. 

Tracking tax status: You can find out whether a group is a qualified nonprofit by checking the IRS' Exempt Organizations Select Check, or EO Select Check, online tool.

It provides the name, employer identification number (EIN), organization type, last known address the organization provided to the IRS, the date the organization was added to the list and, if its tax-exempt status has been revoked, when that happened.

EO Select Check also provides the date of reinstatement if the group applied for that. And if a group is required to file a Form 990-N (this is the case for most small exempt organizations whose annual gross receipts are normally $50,000 or less), whether they've done so.  

The IRS updates the list monthly. This means that the online search tool may continue to show an organization as eligible to receive tax-deductible contributions for a short time after it has had its exempt status revoked.

For the most up-to-date listing of groups that have lost their favorable tax exempt status, you'll want to check the Internal Revenue Bulletin (IRB) for official notice of an organization's tax-exempt status revocation. The IRS has a special Web page with details on this procedure.

Yes, it's a bit of work. But you want to make sure you get your tax deduction.

And more importantly, as the recent questions about Wounded Warriors management underscore, you want to be sure that your money is doing the good work you intended.

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