The UNITED STATES, Defendant.
                                  No. 581-88T.
                           United States Claims Court.
                                 July 13, 1990.
  Church brought action seeking declaration that it was tax-exempt.  Church
 moved to declare final adverse ruling denying tax-exempt status null and void.
 The Claims Court, Bruggink, J., held that administrative determination was not
 null and void;  therefore, church had burden to prove its qualification as tax-
  Motion denied.

 Internal Revenue Service (IRS) administrative determination denying a church
 tax-exempt status was not rendered null and void, even if IRS's decision was
 based on bias and failure to follow procedure;  therefore, church had burden in
 declaratory judgment action to prove tax-exempt status.  26 U.S.C.A. ss
 501(c)(3), 7428;  Tax Court Rule 217(c)(2)(i), 26 U.S.C.A. foll. s

 Internal Revenue Service (IRS) administrative determination denying a church
 tax-exempt status was not rendered null and void, even if IRS's decision was
 based on bias and failure to follow procedure;  therefore, church had burden in
 declaratory judgment action to prove tax-exempt status.  26 U.S.C.A. ss
 501(c)(3), 7428;  Tax Court Rule 217(c)(2)(i), 26 U.S.C.A. foll. s
  *762 Monique E. Yingling, with whom were James A. Harris and Kenneth S.
 Nankin, Washington, D.C., for plaintiff.  Thomas C. Spring, of counsel.
  David Gustafson, with whom were Asst. Atty. Gen. Shirley D. Peterson, Mildred
 L. Seidman, and Gerald B. Leedom, Washington, D.C., for defendant.

  BRUGGINK, Judge.
  This is an action brought pursuant to *763 Internal Revenue Code
 Section 7428. [FN1]  That section permits an organization to obtain a
 declaratory judgment concerning its qualification, under Section 501(c)(3),
 as an organization exempt from taxation.  Pending is plaintiff's motion to
 declare the final adverse ruling null and void. [FN2]  The motion raises the
 question of which party bears the burden of proof in determining plaintiff's
 status.  Plaintiff's position is that the final adverse ruling issued by the
 Internal Revenue Service ("IRS") denying tax-exempt status is null and void,
 and that therefore the burden of proof is allocated as if no final adverse
 ruling had been issued.  If plaintiff is correct, defendant would bear the
 burden of establishing the reasons why plaintiff should not be recognized as
 tax exempt.  Because of the importance of this issue to the merits of the
 complaint, the issue has been isolated for preliminary resolution.  For the
 reasons which follow, the court agrees with defendant that plaintiff bears the
 burden of proof.

      FN1. All references are to the Internal Revenue Code of 1988 (26 U.S.C.).

      FN2. Defendant filed a motion to dismiss on November 22, 1989, based on
     the argument that plaintiff had failed to exhaust its administrative
     remedies, and that the court was thus without jurisdiction.  Plaintiff
     responded with a cross motion for summary judgment, seeking a declaration
     that the IRS Final Adverse Ruling was null and void.  As part of that cross
     motion, plaintiff contends that the IRS bears the burden of proof to
     sustain the grounds for the adverse ruling.  By order of February 13, 1990,
     the court severed the cross motion and deferred further action on it until
     resolution of the motion to dismiss.  The defendant's motion was denied on
     May 3, 1990.  The cross motion was simultaneously reactivated solely with
     respect to the question of which party bears the burden of proof.  That
     issue has been fully briefed, and further argument is deemed unnecessary.

  The parties have filed proposed findings of uncontroverted fact. [FN3]
 Insofar as is relevant to disposing of the pending motion with respect to
 burden of proof, the facts are not materially in dispute.

      FN3. By order of February 13, 1990, the court directed that all
     dispositive motions follow the procedures of RUSCC 56 with respect to use
     of proposed findings of fact.  By opinion dated October 2, 1989, the court
     designated the Administrative Record from which the parties may draw
     factual support.  18 Cl.Ct. 247 (1989).

  In its complaint, plaintiff Church of Spiritual Technology ("CST") states that
 it is a church of the Scientology religion.  It recites that its purpose is to
 preserve and protect the scriptures of the Scientology faith for all
 generations.  The scriptures of Scientology consist of the written and recorded
 spoken words of L. Ron Hubbard, the founder of Scientology.  CST makes
 archival-quality copies of scriptures, preserves them, and stores them.
  CST applied for recognition of exempt status on August 26, 1983.  At the time
 of CST's application, Church of Scientology International ("CSI") [FN4] and
 Religious Technology Center ("RTC") [FN5] had exemption applications pending
 before the IRS.  On January 7, 1986, the IRS issued an initial adverse
 determination letter concerning CST.  On the same day, virtually identical
 letters were issued to CSI and RTC.  In CST's letter the IRS expressed its
 conclusion that the organization is not operated exclusively for exempt
 purposes.  Specifically, it stated, inter alia, that CST is "operated in a
 manner indistinguishable from that of an ordinary commercial enterprise."  The
 initial letter also recites that CST had not supplied "concrete and detailed"
 information in response to IRS' questions.

      FN4. CSI is the "Mother Church" of the Scientology religion.

      FN5. RTC is a California nonprofit religious corporation formed for the
     purpose of ensuring orthodox practice of the Scientology faith.  RTC
     supervises CSI and subordinate churches of Scientology.

  On January 24, 1986 L. Ron Hubbard died, leaving the bulk of his estate to
 CST, conditioned on its being recognized as an exempt organization.  On July 3,
 1986, CST, CSI and RTC filed identical protests of the initial adverse
 determination letters.  On July 8, 1988, the IRS issued final adverse rulings
 with respect to CST.  Similar rulings were made as to the other Scientology
  *764 Four reasons were given for the ruling as to CST.  Solely for the
 purposes of ruling with regard to determination of which party bears the burden
 of proof, defendant is willing to assume that the grounds given by the IRS for
 rejecting exempt status cannot be supported in the record, that IRS employees
 were biased against the Scientology religion, and that the procedures followed
 in the course of the ruling deviated from those outlined in the Internal
 Revenue Manual.
  Tax Court Rule 217(c)(2)(i) directs that the petitioner in a
 Section 7428 declaratory judgment proceeding has the burden of proof as to
 grounds set out in the notice of determination. [FN6]  The parties are agreed
 that the Government bears the burden of proof with respect to grounds not
 raised in a determination letter. [FN7]  In this case there was a determination
 letter.  By its terms, Rule 217 would thus seem to dictate that CST bears
 the burden of proof with respect to those reasons advanced in the IRS final
 determination letter.  It is plaintiff's position, however, that for purposes
 of fixing which side bears the burden of proof, the determination letter should
 be treated as null and void.  Two reasons are advanced in support of
 plaintiff's position.  First, it contends that the IRS discriminates against
 the Scientology religion.  Second, it contends that the IRS failed to follow
 its own procedures in issuing the final ruling.  As defendant has conceded for
 purposes of this motion that there was discrimination and a failure to follow
 procedures, plaintiff concludes that the court should treat the final adverse
 ruling as null and void.

      FN6. There are no special rules governing tax matters in this court.  The
     court has held, however, that Congress expected the Claims Court and the
     district courts to follow the practices of the Tax Court.  Church of
     Spiritual Technology v. United States, 18 Cl.Ct. 247, 250 (1989);
     Church of the Visible Intelligence v. United States, 4 Cl.Ct. 55, 60

      FN7. Tax Court Rule 217(c)(2)(ii).

  CST has not cited the court to any decisions directly supporting its
 position.  It instead places primary reliance on the decision of the district
 court in Center on Corporate Responsibility v. Shultz, 368 F.Supp. 863
 (D.D.C.1973).  That action was one for a refund of withholding taxes.  The
 plaintiff alleged that it was tax exempt pursuant to Section 501(c)(3).
 There were three elements of the holding in Center on Corporate
 Responsibility.  The first was that sanctions were appropriate because of
 willful failure by defendants to comply with discovery orders.  The sanction
 imposed was that defendants could not challenge plaintiff's assertion that it
 was "singled out for selective treatment for political, ideological and other
 improper reasons."  Id. at 871-73.  In light of that fact, the "validity of
 the Service's ruling" was "nullifie[d]" and no basis thus existed for denying
 exempt status.  Id. at 873.  The second holding was that, after considering
 the merits, plaintiff met the requirements necessary for exempt status.  The
 arguments advanced by the IRS were separately addressed and rejected.  Id.
 at 873-78.  As the court points out, the second holding was theoretically
 unnecessary in light of the first.  Id. at 873.  The final holding of the
 case was that the court had the power to enjoin the IRS from denying tax-exempt
 status to the plaintiff so long as its operations were maintained as explained
 to the court.  Id. at 880.
  Center on Corporate Responsibility arose in a different procedural context
 than the case at bar.  It was not an action under Section 7428, which did
 not come into existence until 1976. [FN8]  Rather, it arose as a refund
 proceeding.  There was no occasion, therefore, for the court to discuss whether
 political abuse would void a final adverse ruling and thereby shift the burden
 of proof in an action commenced pursuant to Section 7428.  Plaintiff argues,
 nevertheless, that if political abuse "nullified" the IRS ruling in that
 action, by analogy the court here should treat the final adverse ruling as if
 it had never been issued.  That *765 is far too great a leap to make,
 however.  It is clear from the context of the Center on Corporate
 Responsibility decision that the term "nullified" was not used as a term of art
 in a procedural sense.  The plain import of that aspect of the holding is that
 the Government's reasoning in support of an exemption denial was eliminated.

      FN8. Section 7428 was added by Pub.L. 94-455, Title XIII, s 1306(a), 90
     Stat. 1717 (1976).

  The inapplicability of CST's argument is highlighted by its reliance on
 other cases arising in circumstances totally unrelated to the present action.
 United States v. Caceres, 440 U.S. 741, 99 S.Ct. 1465, 59 L.Ed.2d 733
 (1979), for example, involved a criminal prosecution for bribing a revenue
 officer.  Plaintiff relies on that decision for the proposition that an agency
 must obey its own regulations.  Id. at 751 n. 14, 99 S.Ct. at 1471 n. 14.
 Morton v. Ruiz, 415 U.S. 199, 94 S.Ct. 1055, 39 L.Ed.2d 270 (1974),
 involving a claim for payment of benefits, and Oglala Sioux Tribe of Indians
 v. Andrus, 603 F.2d 707 (8th Cir.1979), involving an action to prevent transfer
 of an employee of the Bureau of Indian Affairs, are to the same effect.  That
 proposition, however, does not assist plaintiff here.  The decisions relied
 upon by CST [FN9] involve determinations on the merits of a claim.  The courts
 did not treat the relevant agency actions as if, from a procedural standpoint,
 they did not exist.  Rather, the courts' holdings that there had been a failure
 to comply with regulations became a part of the rationale in support of
 granting relief on the underlying claim.

      FN9. This applies as well to Lennon v. INS, 527 F.2d 187 (2d
     Cir.1975) (proceeding to determine whether John Lennon was an excludable
     alien), and SEC v. Wheeling-Pittsburgh Steel Corp., 482 F.Supp. 555
     (W.D.Pa.1979) (action to enforce an administrative subpoena).  The
     political harassment found in those decisions was cited as a reason for
     granting or denying relief on the underlying merits issue.

  In the present action, on the contrary, Tax Court Rule 217 addresses a very
 specific matter of tax administration--which side bears the burden of proof.
 If decisions relied upon by plaintiff were analogized to the present case, CST
 would be free to argue, as did the plaintiffs in those decisions, that the
 agency action (the adverse determination letter) is invalid insofar as its
 rationale is undercut by bias or failure to follow agency procedures.  There is
 nothing within the decisions cited by plaintiff, however, which supports the
 proposition that an administrative determination should be treated as if it had
 never been issued.
  It bears repetition, in view of the arguments raised in plaintiff's motion to
 shift the burden of proof, to point out that this action raises a single
 question:  Is plaintiff an organization described in Section 501(c)(3) which
 is exempt from tax under Section 501(a)?  It is appropriate, therefore, to
 test the relevance of plaintiff's arguments in light of the limited focus of
 the court's inquiry under Section 7428.  That determination is normally
 based on the record plaintiff developed at the administrative level.  To the
 extent there was animus, ill-will or discrimination in the ruling itself, that
 impropriety cannot provide analytical support for the Government's position.
 The court's ruling will be drawn from the facts established in the record.  If
 the adverse ruling was affected in the way plaintiff argues, plaintiff's task
 should be concomitantly easier.
  The court recognizes that plaintiff also alleges that there were procedural
 irregularities at the administrative level.  Some of those allegations touch on
 the plaintiff's ability to develop an administrative record.  CST contends, for
 example, that it was prevented at one point from adding certain information to
 the record, and that the final determination was based on information not made
 available to it.  The court has had occasion already in this action to discuss
 the contents of the administrative record, and noted that only under rare
 circumstances can additional evidence be introduced during court proceedings.
 Church of Spiritual Technology v. United States, 18 Cl.Ct. 247, 249 (1989),
 citing Bethel Conservative Mennonite Church v. C.I.R., 746 F.2d 388, 392
 (7th Cir.1984), and Church of Visible Intelligence v. United States, 4
 Cl.Ct. 55, 60 (1983).  Without reopening issues previously resolved, the
 *766 court concludes that the best context for evaluating arguments that go
 to the integrity and fairness of the record is upon consideration of the
 merits.  It would be more appropriate in that context to evaluate the
 prejudicial effect, if any, of the alleged procedural violations, and whether
 it would be appropriate to remedy a violation by adjusting the record.
  The plaintiff's motion to declare the final adverse ruling null and void
 is denied.  Plaintiff will bear the burden of proof with respect to those
 reasons for denial of recognition of exempt status set out in the final adverse
 determination letter.  The parties are directed to file a joint status report
 on or before July 27, 1990 proposing further proceedings.