Scientology Lies

In the latest of a long series of legal battles, the Church of Scientology and the Internal Revenue Service have squared off in court here over constitutional and church-state issues. The trial in United States Tax Court is in its third week and is expected to last a month longer.

The suit, filed by the California branch of the church, contends that the agency's tax policies toward religious organizations are both unconstitutional and arbitrary. The central issue is the revenue service's contention that the church did not qualify for a tax-exempt status from 1970 to 1972 and owed $1.4 million in back income taxes for the period.

Leland Thoburn, a church spokesman, said, "Our contention is that the I.R.S. has overstepped the bounds of constitutionality to try to usurp the powers of Congress by attempting to decide questions of public policy." He defined public policy as practiced by the revenue service as a means of "revoking tax-exempt status on the basis of some vague notion about public morality which the I.R.S. Commissioner arbitrarily applies."

William Connett, district director of the revenue service for Los Angeles, said that public policy required a "situational definition" and added, "Public policy constitutes anything which is contrary to the laws or Federal jurisdiction. The fact of laws enunciates public policy."

Acceptance as Religious Group

Although the service has accepted the church as a religious organization and has granted tax-exempt status for 14 other branches of the Church of Scientology, including the New York church, it contends that there has been no violation of First Amendment rights by revoking t he organization's tax-exempt status. Instead, the revenue servi ce says its disallowance of ta x exemption is based on "a combination of information gathering," including reco rds and theallegation of former church members.

The church, however, says that religions may not be taxed under the First Amendment to the Constitution, which provides for the separation of church and state, and that the revenue service is applying Federal tax codes arbitrarily.

In a brief as a friend of the court, submitted in September, the church was supported in its suit against the revenue service by the National Council of Churches, a coalition of 40 major religious organizations in the United States with a combined membership of 67 million.

Although the brief did not state its agreement with the beliefs of Scientology "in a theological sense," it did support the church's contention that the revenue service was seeking "virtually unfettered discretion to cut off the livelihood of churches and religious organizations with whom they disagree."