LRH resigns as Exec Director. He sells Saint Hill Manor to the Church of Scientology of California.
The IRS removes the C of S of California from the roster of tax exempt organizations. The IRS says it is a for-profit business that enriches church officials. LRH obtains three yachts and starts the Sea Org. He manages Scientology from there.
In Founding Church of Scientology v United States, the Court of Claims found that some of the Founding Church’s money inured to the individual benefit of LRH and family. This included a house maintained by the Church, a percentage of the Church’s income, and other royalties and commissions. The court based its finding of inurement on informal loans made to LRH that were never explained.