Mishler refers to the 'unsatisfactory' arrangements prior to the 1975/6 IRS audit and how he felt that they would not pass the audit. Dettmers gives an explanation of how things were sorted out to satisfy the IRS. I think by that time the IRS had already dealt with COS and removed its exempt status precisely because Hubbard was exploiting his 'Chief Minister' status. COS got EO status reinstated fairly recently after a lot of political pressure.

The issue of comingled funds was just a paper argument to get Rawat a chunk of DLM's donations without the IRS objecting. The officers of DLM, including Mishler really failed the donors IMO, because it was the donors' interests and not Rawat's that the DLM officials should have given priority. Still that's all a moot point because the argument was that the donors wanted Rawat to have their gifts - not the organisation. The fact that most of us were donating to 'spread peace' rather than make 'fatboy' wealthy seemed to have got lost somewhere along the way.