The 9th Circuit handed defeat today to a Jewish couple which has been trying for 15 years to claim tax deductions for a portion of the tuition they pay to Jewish schools attended by their children.
The fascinating part of Marla and Michael Sklar's crusade is that it is based in part on the Internal Revenue Service's decision to grant Scientologists deductions for 80% of fees they pay for auditing and training.
In a ruling issued more than ten months after the case was argued, the judges curtly dismissed the Sklars' argument that the Jewish schools and the Scientology training are similar. "We... conclude that tuition and fee payments to schools that provide secular and religious education as part of one curriculum are quite different from payments to organizations that provide exclusively religious services," Judge Kim Wardlaw wrote.
That conclusion could have been fleshed out a little more, in my view. The panel also offers no explanation I can see of why the Sklars were denied deductions for fees related solely to after-school classes in Jewish Oral Law, or Mishna. There the analogy to the Scientology "auditing and training" seems particularly strong.
The Justice Department is hailing the ruling here. Jeffrey Zuckerman, a Washington attorney who handled the case pro bono for the Sklars, did not respond to an e-mail asking for his reaction.
In any event, the panel viewed its decision as dictated to a great degree by a 9th Circuit decision in 2002, which addressed some of these issues but seemed to leave doors open for further challenges.
A witty concurring opinion from Judge Silverman in that case famously began this way: "Why is Scientology training different from all other religious training? We should decline the invitation to answer that question."
I attended the oral arguments in this case in February. The panel was openly hostile to the government and seemed inclined, at a minimum, to send the case back down for discovery of the precise details of the Scientology deduction rules. The Sklars were never permitted to see that policy.
Like the earlier panel, the panel which wrote today did seem highly skeptical of the alleged IRS policy toward Scientology, stopping just short of calling the deduction unconstitutional. That policy grew out of the settlement of a vast array of litigation between Scientology and the IRS. The panel which wrote today adopted the earlier panel's conclusion that giving the Sklars (and all taxpayers who pay for religious education) a preference that Scientologists allegedly get would only compound the violation of the Establishment Clause.
What was left up in the air today is who has the power to challenge the IRS's deal with the Scientologists. An ordinary taxpayer once might have had standing to do that, but the Supreme Court did away with that in this kind of case back in 2007. See here. It now looks like the alleged unconstitutionality of the Scientologists' tax deal may be one of those government actions which cannot be remedied in the courts.