IRS Probes Kabbalah Centre Finances

The Internal Revenue Service is investigating financial improprieties at the tax-exempt Kabbalah Centre.

The Los Angeles-based spiritual group is run by the Berg family and is devoted to the study of ancient Jewish mysticism. In recent years, the group has attracted celebrity adherents, including Madonna, Gwyneth Paltrow, Ashton Kutcher, Demi Moore, Donna Karan, Sandra Bernhard and Roseanne Barr.

The IRS is reportedly investigating the center and several of its charities, according to the Los Angeles Times. Two of the charities, Raising Malawi and Spirituality for Kids, were both promoted by Madonna, and she reportedly contributed millions of dollars to them. However, in March the singer replaced a Berg family member as CEO of Raising Malawi and moved the charity out of the Kabbalah Centre’s offices after it announced that it was abandoning its plans to build a girl’s school in Malawi after raising millions of dollars for that purpose.

The group has been accused by its own former CFO of financial improprieties. In an August 2010 email, former CFO Nicholas Vakkur wrote, “I have little choice but to cooperate with the IRS and bring down the entire Kaballah Centre.” He said he had uncovered instances of income tax fraud that could bankrupt several of the directors. Vakkur has reportedly already sat down with IRS investigators for a three-hour interview, according to the New York Daily News.

The Kaballah Centre and Spirituality for Kids confirmed the IRS investigation and subpoenas. “The Centre and SFK intend to work closely with the IRS and the government, and are in the process of providing responsive information to the subpoenas,” the group said in a statement quoted by UPI.