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CHURCH OF SCIENTOLOGY OF CELEBRITY CENTRE v. EGGER

May 20, 1982

The CHURCH OF SCIENTOLOGY OF CELEBRITY CENTRE, LOS ANGELES, et al., Plaintiffs,
v.
Roscoe L. EGGER, Jr., et al., Defendants



The opinion of the court was delivered by: SMITH, JR.

MEMORANDUM

 I.

 According to allegations in the complaint, from 1971 until 1974 defendants discriminatorily and illegally held in abeyance and did not rule on applications for exemption from self-employment tax properly filed by Scientology ministers pursuant to section 1402(e) of the Internal Revenue Code, 26 U.S.C. § 1402(e) (1976). In 1974, in response to the filing of a petition for a writ of mandamus by Scientology ministers, see Sorenson v. Alexander, No. 74-2168 (C.D.Cal.1974), defendants denied, without specification of reasons, all pending applications for exemption from self-employment tax filed by Scientology ministers. Beginning the following year, presumably on the basis ofRevenue Ruling 76-415, 1976-2 C.B. 255, defendants again held in abeyance and did not rule on many of the applications for exemption from self-employment tax filed by Scientology ministers. Defendants also denied, without specification of reasons but again presumably on the basis ofRevenue Ruling 76-415, all of the applications not held in abeyance.

 According to further allegations in the complaint, since 1971 defendants have blocked every attempt of Scientology ministers to obtain a judicial resolution of their entitlement to exemption from self-employment tax. Defendants have refused to assess Scientology ministers for self-employment tax and, at the same time, have refused to contest requests for refunds filed by Scientology ministers who voluntarily paid the self-employment tax.

 Plaintiffs set forth their claims in four counts. In Count One, plaintiffs assert a right of judicial review under the Administrative Procedure Act, 5 U.S.C. § 702 (1976), and seek declaratory and injunctive relief from two practices employed by defendants in violation of section 1402(e) of the Internal Revenue Code. The two practices challenged include, first, defendants' practice of holding in abeyance and not ruling on Scientology ministers' applications for exemption from self-employment tax, and, second, defendants' practice of denying Scientology ministers applications for exemption from self-employment tax on the basis ofRevenue Ruling 76-415. In Count Two, plaintiffs proceed under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 91 S. Ct. 1999, 29 L. Ed. 2d 619 (1971), and seek declaratory, injunctive and monetary relief from three practices employed by defendants, with the exception of defendant Egger, in violation of section 1402(e) and various provisions of the Constitution. The three practices challenged include the two that are the subject of Count One and, as well, defendants' practice of not including a statement of reasons with denials of Scientology ministers' applications for exemption from self-employment tax.

 In Counts Three and Four, plaintiffs proceed under sections 1985 and 1986 of title 42, respectively, and seek declaratory, injunctive and monetary relief arising out of a conspiracy in which defendants, with the exception of defendant Egger, discriminatorily and illegally denied Scientology ministers' applications for exemption from self-employment tax.

 Defendants, in their motion to dismiss, argue that all of plaintiffs' claims are barred by either the Declaratory Judgment Act, 28 U.S.C. § 2201 (Supp. III 1979), or the Anti-Injunction Act, 26 U.S.C. § 7421(a) (Supp. III 1979). The Declaratory Judgment Act restricts this Court's power to grant declaratory relief by providing that federal courts shall grant declaratory relief

 
except with respect to Federal taxes other than (in) actions brought under section 7428 of the Internal Revenue Code of 1954 or a proceeding under section 505 or 1146 of title 11.
 
(e)xcept as provided in sections 6212(a) and (c), 6213(a), 6672(b), 6694(c), 7426(a) and (b)(1), and 7429(b) (of the Internal Revenue Code), no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.

 26 U.S.C. § 7421(a) (emphasis added). Although the two acts are not similarly worded, in this Circuit the two acts are interpreted coterminously. Investment Annuity, Inc. v. Blumenthal, 197 U.S. App. D.C. 235, 609 F.2d 1, 4 (D.C.Cir.1979), cert. denied sub nom. First Investment Annuity Co. v. Miller, 446 U.S. 981, 100 S. Ct. 2961, 64 L. Ed. 2d 837 (1980); Eastern Kentucky Welfare Rights Organization v. Simon, 165 U.S. App. D.C. 239, 506 F.2d 1278, 1283 (D.C.Cir.1974), rev'd on other grounds, 426 U.S. 26, 96 S. Ct. 1917, 48 L. Ed. 2d 450 (1976); "Americans United" Inc. v. Walters, 155 U.S. App. D.C. 284, 477 F.2d 1169, 1175-76 (D.C.Cir.1973), rev'd on other grounds sub nom. Alexander v. "Americans United" Inc., 416 U.S. 752, 94 S. Ct. 2053, 40 L. Ed. 2d 518 (1974). Thus, despite its broad language, the Declaratory Judgment Act bars only declaratory relief sought "for the purpose of restraining the assessment or collection of any tax."

 II.

 In the first of their claims under Count One, plaintiffs request that this Court declare unlawful and enjoin defendants' practice of holding in abeyance and not ruling on Scientology ministers' applications for exemption from self-employment tax. Affirmatively, plaintiffs request that this Court order defendants to rule promptly on all of the Scientology ministers' applications currently pending. In opposing defendants' motion to dismiss, plaintiffs argue that ...


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