OPINION and ORDER
Bеfore the court are Plaintiffs Motion for Summary Judgment (plaintiffs Motion or Pl.’s Mot.), Plaintiffs Memorandum in Support of Its Motion for Summary Judgment (plaintiffs Memorandum or Pl.’s Mem.), the Cross-Motion of the United States for Summary Judgment and Brief in Support Thereof and in Opposition to Plaintiffs Motion for Summary Judgment (defendant’s Motion or Def.’s Mot.), Plaintiffs Reply in Opposition to Defendant’s Cross Motion for Summary Judgment, and in Support of Plaintiffs Motion for Summary Judgment (plaintiffs Reply or Pl.’s Reply), defendant’s Reply for the United States in Support of Its Cross Motion for Summary Judgment and in Opposition to Plaintiffs Motion for Summary Judgment (defendant’s Reply or Def.’s Reply), the Supplementary Brief of the United States on the Questions of Jurisdiction, Evidence, and Exhaustion of Administrative Remedies, Pursuant to the Order of April 9, 2009 (defendant’s Supplemental Brief or Def.’s Supp. Br.), and Plaintiffs Supplemental Brief on Issues Raised by the Court (plaintiffs Supplemental Brief or Pl.’s Supp. Br.). Also before the court is the administrative record (Admin. Rec.), which was filed on October 23, 2006, and supplemented on September 25, 2008.
For the following reasons, plaintiffs Motion is DENIED, and defendant’s Motion is GRANTED.
I. Background
A. Identity of Plaintiff
Plaintiff, Foundation of Human Understanding (Foundation), is a California nonprofit corporation incorporated on June 17, 1963. Admin. Rec. 461; Plaintiffs Proposed Findings of Uncontroverted Fact (RCFC
Plaintiffs Articles of Incorporation state that plaintiffs “specific and primary purposes are the promulgation of the religious, charitable, scientific, literary and educational aspects of mind over matter and spiritual health known as psychocatalysis.” Admin. Rec. 462. “Roy Masters has developed a particular form of meditation that is used by his followers.” Pl.’s Mem. 6; Admin. Rec. 6390-6460 (Technical Advice Pre-Submission Conference Material) 51 (“[Foundation’s] form of worship is self meditation”).
B. Procedural History
“The Internal Revenue Service [(IRS)] formally recognized plaintiffs tax-exempt status as an organization described in the Internal Revenue Code [(Code or I.R.C.)] § 501(c)(3) on December 20, 1965.” Defendant’s Proposed Findings of Facts (defendant’s Facts or Def.’s Facts) ¶ 4; Plaintiffs Response to Defendant’s Proposed Findings of Facts (plaintiffs Response to defendant’s Facts or Pl.’s Resp. to Def.’s Facts) 5; Admin. Rec. 456. “On August 17,1970, plaintiff filed with the IRS a Form 4653, ‘Notification Concerning Foundation Status,’ indicating that it was not a private foundation because it was a church under I.R.C. § 170(b)(l)(A)(i) and an organization described in I.R.C. § 509(a)( [1]).” Def.’s Facts ¶ 4; Pl.’s Resp. to Def.’s Facts 5. On October 20, 1970, the IRS issued a determination that plaintiff was not a private foundation under I.R.C. § 509(a) because it was a publicly supported organization under I.R.C. § 170(b)(l)(a)( [vi]). Joint Stip. ¶ 7 (citing Admin. Rec. 28); see also Def.’s Facts ¶ 4; Pl.’s Resp. to Def.’s Facts 5. “In or before 1979, [plaintiff] again requested a ruling from the IRS that it was a church.” Def.’s Facts ¶5; Pl.’s Resp. to Def.’s Facts 5. In response to this request, the IRS issued an adverse determination letter on March 13, 1980 denying plaintiffs application to have its exemption classification modified to that of a church under I.R.C. §§ 509(a)(1) and 170(b)(l)(A)(i). Joint Stip. ¶ 10 (citing Admin. Rec. 29-30); see also Def.’s Facts ¶ 5; Pl.’s Resp. to Def.’s Facts 5. After plaintiff filed a protest, defendant issued a final adverse determination letter on February 23, 1982 stating that while plaintiff was a religious and educational organization, it did not qualify as a church. Joint Stip. ¶ 12 (citing Admin. Rec. 30); Def.’s Facts ¶ 5; Pl.’s Resp. to Def.’s Facts 5. Subsequently, plaintiff brought suit in the United States Tax Court (Tax Court) seeking a declaratory judgment that it qualified as a church under I.R.C. § 170(b)(1)(A)®. Def.’s Facts ¶5; Pl.’s Resp. to Def.’s Facts 5-6; Joint Stip. ¶ 13 (citing Admin. Rec. 38). In 1987, addressing plaintiffs operations for periods before 1983, the Tax Court held that plaintiff qualified as a church under I.R.C. § 170(b)(1)(A)®. Joint Stip. ¶ 18 (citing Admin. Rec. 53); Def.’s Facts ¶ 6; Pl.’s Resp. to Def.’s Facts 6; Found. of Human Understanding v. Comm’r (Foundation I),
In a letter dated October 16, 2001, the IRS notified plaintiff that it was commencing a church tax inquiry to resolve questions concerning plaintiffs continued qualification as a church under § 170(b)(1)(A)®. Def.’s Facts ¶ 17; Pl.’s Resp. to Def.’s Facts 14; Admin. Rec. 1. Plaintiff responded on November 21, 2001. Def.’s Facts ¶ 17; Pl.’s Resp. to Def.’s Facts 14; Admin. Rec. 228. On December 21, 2001, the IRS sent plaintiff a Notice of Church Tax Examination. Def.’s Facts ¶ 17; Pl.’s Resp. to Def.’s Facts 14; Admin. Rec. 314. The church tax examination concluded
Plaintiff instituted the current action on September 13, 2004, to dispute defendant’s revocation of its church status. Plaintiffs Complaint (Compl.) “passim. Plaintiff contends that it is entitled to a declaratory judgment pursuant to § 7428 that it qualifies as a church under § 170(b)(1)(A)® as a matter of law. Pl.’s Mem. 2. Defendant maintains that, as a matter of law, plaintiff cannot prove that it meets the critical factors necessary to qualify as a church under § 170(b)(1)(A)®, and therefore cannot sustain its burden of proving that defendant erroneously revoked its status as a non private foundation under I.R.C. § 509(a)(1). Def.’s Mot. 1, 44. Because the court determined that portions of the parties’ arguments warranted further discussion, the court heard oral argument on the parties’ Motions on May 27, 2009. See Transcript of May 27, 2009 Oral Argument (Tr.).
The sole issue before the court is whether plaintiff qualifies as a church described in § 170(b)(1)(A)®.
4.
II. Jurisdiction
A. The Statutory Scheme; I.R.C. § 7428(a), I.R.C. § 501(c)(3), I.R.C. § 509(a), and I.R.C. § 170(b)(1)(A)®-(vi)
Section 7428(a) of the Code vests the United States Court of Federal Claims with jurisdiction to grant relief in cases of actual controversy involving the revocation of a taxpayer’s tax-exempt classification. I.R.C. § 7428 (2006). “[T]he statute’s primary purpose is to provide nonprofit organizations claiming tax-exempt or non-private foundation status with an avenue for prompt judicial relief from erroneous or arbitrary determinations by the Internal Revenue Service.” Friends of Soc’y of Servants of God v. Comm’r (Friends),
Section 7428(a) provides that in the case of an actual controversy involving a determination by the Secretary of the Treasury “with respect to the initial classification or continuing classification of an organization as a private foundation (as defined in section 509(a)),” I.R.C. § 7428(a)(1)(B), the United States Court of Federal Claims “may make a declaration with respect to such initial qualification or continuing qualification,” I.R.C. § 7428(a).
B. Application of the Statutory Scheme
In order properly to invoke this court’s declaratory judgment jurisdiction under I.R.C. § 7428(a), there must exist an “actual controversy.” I.R.C. § 7428(a). An actual controversy exists when the taxpayer has received an adverse ruling from the IRS. CREATE v. Comm’r (CREATE),
Plaintiff seeks a declaration by this court that it qualifies as a church following defendant’s determination that plaintiff no longer qualified as a “church” under I.R.C. § 170(b)(l)(A)(i), and defendant’s subsequent revocation of plaintiffs church classification. Compl. 1. Defendant’s revocation is a determination made by the Secretary “with respect to the ... continuing classification of an organization as a private foundation (as defined in section 509(a)).” See I.R.C. § 7428(a)(1)(B). Although plaintiff remains classified as a non private foundation under § 509(a)(1) as a publicly supported charity under § 170(b)(l)(A)(vi), that classification is a different and less advantageous status than the § 509(a)(1) status which plaintiff previously held and presently seeks. See Exempt Organizations at IV(E)(5)(a) (discussing the fact that status as a church is more advantageous than as a publicly supported charity because, for example, “a church receives preferential treatmеnt under the [Internal Revenue] Code (principally [because of] the exemption from filing annual information returns ... and the restriction on audits of churches”)); Spiritual Outreach Soc’y v. Comm’r (Spiritual Outreach II),
Section 7428(b) also requires that the taxpayer exhaust all administrative remedies available to it within the IRS before this court’s authority can properly be exercised. I.R.C. § 7428(b)(2); St. Matthew Publ’g, Inc. v. United States (St. Matthew Publishing),
Because plaintiff meets both jurisdictional prerequisites, this case is properly before this court pursuant to I.R.C. § 7428.
III. Standards of Review and Scope of Review
A. Judgment on the Administrative Record
Rule 52.1 of the Rules of the Court of Federal Claims (RCFC) provides for judgment on the administrative record “[w]hen proceedings before an agency are relevant to a decision in a case” before the court. RCFC 52.1(a). Cases filed in this court, such as the present action filed by plaintiff, “frequently turn in part on action taken by an administrative agency.” RCFC 52.1 Rules Comm. Note (2006). “In such cases, the administrative record may provide a factual and procedural predicate for a portion of the court’s decision [.] ...” Id. RCFC 52.1 applies “whether the court’s decision is derived in whole or in part from the agency action reflected in the administrative record.” Id. RCFC 52.1 doеs not address the standards and criteria to be applied in cases decided pursuant to RCFC 52.1 because “[t]he standards and criteria governing the court’s review of agency decisions vary depending upon the specific law to be applied in [the] particular ease[ ].” Id. Accordingly, the standards of review and burdens of proof and persuasion are set by the terms of the applicable substantive law, which in this action comprises both the statutory and case law discussed further below.
To render a decision in this case, the court must determine whether plaintiff is entitled to a declaratory judgment that it qualifies as a church pursuant to § 170(b)(l)(A)(i) as a matter of law.
B. Declaratory Judgment Actions Pursuant to I.R.C. § 7428(a)(1)(B)
1. De Novo Review
In deciding whether plaintiff is entitled to declaratory judgment, the determination made by the IRS is reviewed de novo by the court in both initial classification and revocation eases. Exempt Organizations at V(D)(1) (stating that declaratory judgment cases are “reviewed de novo by the court,” but noting that “the scope of review in initial qualification and classification cases is limited to the administrative record”); New Dynamics Found, v. United States (New Dynamics),
2. Burden of Proof on Plaintiff
Courts have recognized that exemptions from tax are matters of “legislative grace,” and, accordingly, the burden of establishing entitlement to an exemption is on the taxpayer. See, e.g., Christian Echoes Nat’l Ministry, Inc. v. United States,
3. Supplementation of Administrative Record in Revocation Cases
The applicable scope of review in revocation cases differs from the scope of review in initial determination cases. See Universal Life Church, Inc. v. United States (Universal Life Church),
4. Evidence Restricted to Tax Years 1998-2000
The revocation of plaintiffs church status was based on defendant’s audit of plaintifPs activities during tax years 1998, 1999, and 2000. Def.’s Supp. Brief 36 (“The period examined by the IRS [was] January 1, 1998 until December 31, 2000.”). Following defendant’s audit of plaintiff, plaintiff retained its § 501(c)(3) tax-exempt status. Def.’s Supp. Br. Ex. A (IRS Letter to Plaintiff dated September 12, 2004) 1 (‘Torn- tax-exempt status under section 501(c)(3) is not affected.”). Although plaintiff retained its non private foundation status under section 509(a)(1), that status was retained because of plaintiffs qualification as a publicly supported charity under § 170(b)(l)(A)(vi), and not as a church under § 170(b)(l)(A)(i). Id. (“We have modified your foundation status to that of a public charity described in sections 509(a)(1) and 170(b)(l)(A)(vi) of the Code.”); Def.’s Mot. 5 (“[T]he Commissioner has ruled that [p]laintiff is a publicly supported organization described in 170(b)(l)(A)( [vi]-”)).
Case law dictates, and the parties agree, that because defendant’s revocation of plaintiffs church status was based on the three years audited by the IRS, this court’s declaratory judgment power, and therefore its review of the facts in this case, is limited to plaintiffs activities during the fiscal years 1998, 1999, and 2000. Def.’s Supp. Br. 37 (“Since the [e]ourt may review only those years under audit, the appropriate scope of evidence is limited to evidence pertaining to those years.”); Pl.’s Supp. Br. 3 (“[E]vidence of tax-exempt status should relate to the audit period_”); Oral Argument of May 27, 2009, Argument of Mr. Marc Sellers at 9:15:23-43; Tr. 15:4-8 (Sellers) (“To the extent that evidence ... d[oes] not pertain to the tax years in question it would not be relevant to the court’s determination [of plaintiffs present declaratory judgment action].”); Oral Argument of May 27, 2009, Argument of Mr. Michael Roney at 9:41:59; Tr. 35:16-18 (Roney) (agreeing with plaintiffs description of scope of relevant evidence). In Synanon, the plaintiff filed suit in the United States District Court for the District of Columbia following defendant’s revocation of the plaintiffs tax-exempt status, seeking a declaratory judgment under § 7428 that the plaintiff qualified as a tax-exempt organization under I.R.C. § 501(a) (2006). Synanon,
Here, as in Synanon, if plaintiff believes that it should be declared exempt for any tax years subsequent to those which formed the subject of defendant’s audit, “it should petition for exempt status for those years. Until plaintiff so applies, the [Internal Revenue] Service cannot make a determination with respect to those years. Absent a determination, there is nothing for the [e]ourt to review.”
5. Plaintiffs Qualification for Church Status Under I.R.C. § 170(b)(l)(A)(i) Is the Sole Issue Before the Court
a. The Court’s Review Does Not Judge Plaintiffs Religious Beliefs
The sole issue before the court is whether plaintiff qualifies as a church described in § 170(b)(l)(A)(i). See supra Part I.B. Several courts have acknowledged the possible First Amendment concerns that may arise when determining a taxpayer’s qualification as a “church” under § 170. In Church of the Visible Intelligence, the United States Claims Court stated that the lack of Congressional guidance in providing a ready distinction between the term “church” and the term “religious organization” for purposes of interpreting the Code was likely due to First Amendment concerns. Church of the Visible Intelligence,
Foundation, like the plaintiff in American Guidance Foundation, Inc. v. United States (American Guidance), holds benefits derived from its status as a tax-exempt organization under §§ 501(c)(3) and 509(a) which “are not in jeopardy.” See American Guidance,
The court is not here called upon to determine constitutional questions, nor is it called upon to determine the “philosophical, theological, or ecclesiastical refinements” of the term “church.” See Chapman,
b. The Court Does Not Reach the Constitutionality of Defendant’s Action
Plaintiff makes vague allegations in its briefing regarding the constitutionality of defendant’s ci’iteria for determining qualification of a taxpayer for church status under § 170(b)(l)(A)(i) and the application of those criteria to plaintiff. See, e.g., Pl.’s Mem. 18-19. Plaintiffs statements of concern appear, as defendant suggests, to be criticisms of defendant’s examination of various factual elements customarily considered when determining church status, rather than criticisms of the exemption given to churches. See id. Of course, an attack on the exemption itself would, if successful, eliminate the category within which plaintiff seeks to be classified. Def.’s Reply 2 n. 1.
While the government “may constitutionally tax the income of religious organizations [and] may decide not to exercise this power and grant reasonable exemptions to qualifying organizations while continuing to tax those who fail to meet these qualifications,” The Ecclesiastical Order of the ISM of AM, Inc. v. Comm’r (Ecclesiastical Order),
In this case, plaintiffs First Amendment concerns are stated in a conelusory fashion, and not fully briefed by either party. See Pl.’s Mem. passim; Def.’s Mot. passim; Pl.’s Reply passim; see also Hernandez v. Comm’r,
Having established that plaintiffs constitutional concerns are not squarely before the court here, the court notes that it is, and believes it should be, uncomfortable with the criteria used by the IRS for determination of the church status of religious organizations. See generally, Tr. 42:8-47:17 (colloquy between the court and defendant about the definition of church and the Establishment Clause).
In its 2008 U.S. Religious Landscape Survey (Survey), the Pew Forum on Religion and Public Life found that “religious affiliation in the U.S. is both very diverse and extremely fluid.” The Pew Forum On Religion and Public Life, U.S. Religious Landscape Survey 5 (Feb. 25, 2008), available at http://religions.pewforum.org/pdf/report-religious-landseape-study-full.pdf (last visited June 22, 2009). The Survey includes a brief history of the role of religion in the United States Census. Id. at 108. The Survey states that census takers in the United States began asking questions about religious organizations in 1850. Id. Subsequent to the establishment of the U.S. Census Bureau in 1902 and the statutory crеation of the Census of Religious Bodies as a stand-alone census in 1906, the first Census of Religious Bodies asked many of the same questions as earlier censuses. Id. These questions included “year the congregations were established; ... number of ministers and their salaries; number of congregation-operated schools, teachers, scholars and officers; and demographic characteristics of congregation members.” Id. “The ultimate demise [of the Census of Religious Bodies] in 1956 stemmed in part from a growing public debate over the propriety, merit and feasibility of the Census Bureau asking questions about religion.” Id. at 109. Those who opposed questions on religion voiced concerns about “the protection of religious liberty and privacy rights, and whether the government was overstepping the constitutional boundaries separating church and state.” Id.
The criteria used by the IRS to determine church status for tax purposes, see infra Part IV.A.2, bear a striking similarity to the topics of the questions contained in the 1906 Census of Religious Bodies. This resemblance strongly suggests that defendant’s criteria are time-conditioned and reflect institutional characteristics that no longer capture the variety of American religions and religious institutions in the twenty-first century. The regime appears to favor some forms of religious expression over others in a manner in which, if not inconsistent with the letter of the Constitution, the court finds troubling when considered in light of the constitutional protections of the Establishment and Free Exercise Clauses.
IV. Discussion
A. Applicable Tests
Several courts have recognized that “there is very little guidance for courts to use in making decisions [as to church status].” Spiritual Outreach II,
The United States Supreme Court has discussed the definition of the term “church” in an opinion involving an exemption from unemployment compensation taxes imposed by the Federаl Unemployment Tax Act (FUTA). St. Martin Evangelical Lutheran Church v. South Dakota (St. Martin),
“The Internal Revenue Code is silent as to the definition of the term ‘church,’ as are the regulations promulgated under section 170.” VIA v. Comm’r (VIA),
The United States District Court for the District of Columbia examined the definition of the term “church” in a declaratory judgment suit in American Guidance. Despite the fact that almost thirty years have passed since the court’s opinion in American Guidance, it remains true that “a coherent definition [of the term does not] emerge from reviewing ... the limited instances of judicial treatment.” American Guidance,
In the absence of Congressional guidance and without any guidance from within the regulations themselves, courts have developed at least three different approaches to determine whether a taxpayer qualifies as a “church” for purposes of section 170(b)(l)(A)(i). See VIA
1. The De La Salle Approach
In De La Salle Institute v. United States (De La Salle), the United States District Court for the Northern District of California heard a suit brought by an organization contending that it was exempt from taxation imposed upon its unrelated business income due to its qualification as a church under I.R.C. § 511(a)(2)(A). De La Salle,
The court agrees with the reasoning of the cases subsequent to De La Salle, and likewise declines to adopt the De La Salle approach.
2. The IRS’s Fourteen Criteria
Several district courts have applied, without explicitly adopting, a fourteen-criteria standard introduced in 1977 by Jerome Kurtz, then Commissioner of Internal Revenue, and thereafter applied by the IRS to evaluate whether an organization qualifies for church status pursuant to § 170(b)(l)(A)(i). Brace R. Hopkins, The Law of Tax-Exempt Organizations § 10.3, at 316-318 (9th ed.2007) (describing the introduction of the criteria in 1977 and stating, “courts are evidencing acceptance of the IRS criteria.”); Pl.’s Mem. 17; Def.’s Mot. 18. The Tax Court has applied the fourteen criteria in several cases. See, e.g., First Church of In Theo v. Comm’r (First Church of In Theo),
The United States Court of Appeals for the Eighth Circuit (Eighth Circuit) similarly views the fourteen criteria “as a guide, helpful in deciding what constitutes a church.” Spiritual Outreach II,
Plaintiff is not required to meet each criterion in order to obtain classification as a church for federal tax purрoses. Spiritual Outreach II,
(1) a distinct legal existence;
(2) a recognized creed and form of worship;
(3) a definite and distinct ecclesiastical government;
(4) a formal code of doctrine and discipline;
(5) a distinct religious history;
(6) a membership not associated with any church or denomination;
(7) an organization of ordained ministers;
(8) ordained ministers selected after completing prescribed studies;
(9) a literature of its own;
(10) established places of worship;
(11) regular’ congregations;
(12) regular religious services;
(13) Sunday schools for the religious instruction of the young; and
(14) schools for the preparation of its ministers.
Church of the Visible Intelligence,
Due partly to concerns over a mechanical application of rigid criteria to a diverse set of religious organizations, some courts have deemed a few of the criteria within the fourteen-factor IRS test to be of special, or “central” importance. The leading case is American Guidance, in which the United States District Court for the District of Columbia articulated the following standard:
While some of the [fourteen criteria applied by the IRS] are relatively minor, others, e.g.[,] the existence of an established congregation served by an organized ministry, the provision of regular religious services and religious education for the young, and the dissemination of a doctrinal code, are of central importance.
American Guidance,
The court shares prior courts’ concerns over a mechanical application of rigid criteria to a diverse set of religious organizations. However, it does not appear to the court that any problems resulting from a mechanical application of the fourteen factors are likely to be ameliorated by determining that a lesser number of those factors, “the existence of an established congregation served by an organized ministry, the provision of regular religious services and religious education for the young, and the dissemination of a doctrinal code, are of “central importance.” ” See American Guidance,
Courts have also followed American Guidance in finding that a “church” may be distinguished from other religious organizations by fulfillment of an “associational role:”
The means by which an avowedly religious purpose is accomplished separates a “church” from other forms of religious enterprise. At a minimum, a church includes a body of believers or communicants that assembles regularly in order to worship. Unless the organization is reasonably available to the public in its conduct of worship, its educational instruction, and its promulgation of doctrine, it cannot fulfill this associational role.
American Guidance,
The parties’ briefing addresses separately plaintiffs qualification for church status under the fourteen criteria and under the associational standard. See Def.’s Mot. 42; Pl.’s Mem. 16 (addressing associational test separately from the fourteen criteria); Pl.’s Reply 19 (same). After a discussion of cases which are reаdily distinguishable from plaintiffs case, this Opinion addresses the fourteen criteria and the associational standard.
4. Cases Readily Distinguishable From This Case
There are few cases which could provide guidance to the court on the legal issues presented in this case. That small number is further reduced by the limited persuasive usefulness of cases in which the fact patterns are readily distinguishable from this case.
First, this ease is easily distinguishable from cases in which church status has been denied to organizations serving primarily secular functions. In one ease, plaintiff, Jun-aluska Assembly Housing, Inc., was formed by the United Methodist Church as a separate corporation. Junaluska Assembly Housing, Inc. v. Comm’r (Junaluska),
In Lutheran Social Service, the plaintiff provided services including child care and adoption services, various counseling services, and residential treatment services to individuals within a variety of segments of its community, irrespective of the individuals’ religious beliefs. Lutheran Social Service,
Plaintiff in this case, however, cannot be properly analogized to either the social services agency in Lutheran Social Service, nor can it be accurately described as an organization serving primarily secular* functions such as the contracting services provided by the plaintiff in Junaluska and the dentistry services provided by plaintiff in Chapman. The record makes clear that plaintiff serves a religious purpose. See infra Part IV.B.l.n at n. 23 (discussing plaintiffs status as a religious organization and describing its form of worship).
Second, plaintiff in this ease presents a more robust institutional record than did individuals seeking declaratory judgments in cases where the courts characterized litigants as either individual or single-family private religious enterprises. In Jeffries, the Seventh Circuit held that an individual’s “effort to create his one-person church” in that case did not qualify as a church in light of the fourteen IRS criteria. Jeffries,
The evidence presented in these cases was held to be clearly insufficient to meet the criteria for church status. The facts presented in the record before the court in this case, however, establish that plaintiffs followers include more than a single individual. Def.’s Facts ¶ 41; Pl.’s Resp. to Def.’s Facts 34. The individual adherents extend beyond the founder’s immediate family. Def.’s Facts
B. Application of the Tests to Plaintiff
Upon an analysis of plaintiffs evidence in light of the fourteen criteria and the associations! test, and exercising as much caution as possible in order to avoid a mechanical application of the fourteen criteria, the court reaches the following conclusions.
1. The IRS’s Fourteen Criteria
a. Independent Legal Existence
It is uncontested that plaintiff has an independent legal existence. Foundation is a California nonprofit corporation incorporated on June 17,1963. Admin. Ree. 461.
b. Recognized Creed and Form of Worship
It is also uncontested that plaintiff has a recognized creed and form of worship. In Foundation I, the Tax Court found that plaintiffs “emphasis on emotional self-control through a specific type of meditation as the key to salvation sets [plaintiff] apart from other recognized religions.” Foundation I, 88 T.C. at 1359. Defendant “does not challenge [pjlaintiffs assertion that this finding satisfies this criterion” for the purposes of the present case. Def.’s Mot. 21.
e. Membership Not Associated With Any Other Church or Denomination
Plaintiff concedes that it does not have a membership unassociated with any other church or denomination. Pl.’s Reply 12 (“Defendant correctly states that plaintiff has no formal membership. Nor does [p]laintiff require that its congregants аbandon affiliations with other churches or faiths.”). Plaintiff does not require its followers to reject membership in other churches. See Pl.’s Mem. 7. Plaintiff has “thousands of Foundation adherents or followers who practice the meditation techniques, attend seminars, read the Foundation publications, including approximately 2,000 in the Grants Pass, Selma, Medford Area of [Oregon].” Def.’s Facts ¶ 41; Pl.’s Resp. to Def.’s Facts 34. However, despite having adherents or followers, plaintiff has no formal membership. Pl.’s Facts ¶ 9; Def.’s Resp. to Pl.’s Facts 13; see also Def.’s Facts ¶41; Pl.’s Resp. to Def.’s Facts 34 (“The Foundation does not have members per se.”).
d. Distinct Religious History
Plaintiffs evidence is sufficient to demonstrate its distinct religious history. At the time of the Foundation I decision, plaintiff already had “a distinct, if relatively short, religious history.” Foundation I,
e. Literature of Its Own
The administrative record reflects that plaintiff has a literature of its own. Plaintiff maintains an internet website at http://www. fhu.com/. Def.’s Facts ¶ 7; Pl.’s Resp. to Def.’s Facts 7. On its website, plaintiff sells materials authored by Roy Masters. Def.’s Facts ¶ 10; Pl.’s Resp. to Def.’s Facts 9. Among its offerings are “Sex Without Sin 1 & 2,” “Overcoming Overeating,” “Dealing Properly with Children,” “How to Survive Your Wife & Mother,” and How to Conquer Negative Emotions. Def.'s Facts ¶ 10; Pl.’s Resp. to Def.’s Facts 9-10. Plaintiffs offerings in audio format include “Love and Marriage,” “Health and Addiction,” “Family & Parenting,” and “Christmas Special — Collector’s Videos.” Def.’s Facts ¶ 10; Pl.’s Resp. to Def.’s Facts 9-10. Plaintiff publishes a monthly newsletter, New Insights, which includes articles written by its founder, Roy Masters. Def.’s Facts ¶ 11; Pl.’s Resp. to Def.’s Facts 10. New Insights has a paid subscription list of 898 and is distributed free of charge to another 172 individuals. Def.’s Facts ¶ 11; Pl.’s Resp. to Def.’s Facts 10. Defendant’s contention that plaintiffs literature is not “substantial” enough to qualify as a distinct religious literature is unpersuasive. See Def.’s Reply 13.
f. Established Place of Worship
Plaintiff has demonstrated that it has an established place of worship. Plaintiffs current headquarters is Tall Timber Ranch, a property in Selma, Oregon, which plaintiff purchased in 1979. See Def.’s Facts ¶ 16; Pl.’s Resp. to Def.’s Facts 13. During the meetings which take place at Tall Timber Ranch, “Foundation ministers conduct personal counseling; instruction in meditation techniques and self-awareness and otherwise present and discuss the ... teachings of the Foundation.” See Pl.’s Facts ¶ 13; Def.’s Resp. to Pl.’s Facts 15.
The court does not find defendant’s argument persuasive. The ease law does not dictate, nor does the court find, that a religious organization must have various places in which it conducts its activities in order to satisfy this criterion. Defendant also takes issuе with the fact that plaintiff has not cited any evidence of the frequency of worship at this location. Def.’s Mot. 33 n. 23. However, the frequency of worship at a particular location is not a consideration in the court’s determination of this factor. See, e.g., Spiritual Outreach I,
g. Definite and Distinct Ecclesiastical Government
Plaintiff has presented evidence sufficient to establish that it has a definite and distinct ecclesiastical government. Plaintiff contends that it satisfies this requirement because its “board of directors and ministry have directed its operations from its inception.” Pl.’s Mem. 20. Plaintiff further states that because the evidence shows that “[plaintiffs affairs are governed by its [b]oard of [directors ... [which is] comprised of individuals including its ministers and its Founder,” plaintiff satisfies this criterion. Pl.’s Supp. Br. 5-6. While plaintiff correctly states that ease law does not “suggest any threshold governmental structure that would satisfy [this criterion],” Pl.’s Mem. 20, case law does provide that an ecclesiastical government is responsible for religious or doctrinal decisions. See Foundation I,
h. Formal Code of Doctrine and Discipline
Plaintiff has demonstrated that it satisfies this criterion. The IRS’s church tax inquiry letter of October 16, 2001, asked the following question of Foundation: “Do you impose a formal code of doctrine upon your members? If so, is there any form of discipline (spiritual or otherwise) employed? Explain in detail.” Def.’s Facts ¶ 41; Pl.’s Resp. to Def.’s Facts 33. Plaintiffs response to the IRS, sent November 21, 2001, was the following:
The form of discipline which the Foundation teaches is an individual discipline in the meditative practices taught by Roy Masters, including understanding the true relationship of men and women toward God and toward each other and in their society. It is fundamental to the discipline as taught by the Foundation and Roy Masters that individuals overcome their own emotional impulses and societal influences, to take control of their lives through meditative practices and self-discipline. Those who fail to do so are at risk of both consciously and unconsciously being controlled by the forces of evil and society. This code of doctrine and discipline is set forth in detail in the writings of Roy Masters which are disseminated by the Foundation.
Def.’s Facts ¶ 41; Pl.’s Resp. to Def.’s Facts 34. Plaintiff also attached a statement of belief written by its founder, Roy Masters, as proof that Foundation meets this requirement. Admin. Rec. 7081-85. While plaintiff has not provided any evidence demonstrating its formal adoption of the doctrine or discipline described in either its response to the defendant’s inquiry letter or in Roy Masters’s statement, the court does not find that omission dispositive. The teachings of Roy Masters focus on an individual’s ability to “take control of [his life] through ... self-discipline ... [in order to avoid] being controlled by the forces of evil and- society.” Del’s Facts ¶ 41; Pl.’s Resp. to Def.’s Facts 34. One would not expect to find a doctrine such as plaintiffs — which emphasizes “self-discipline” — to be vindicated by external means. The “discipline” is the “risk of both consciously and unconsciously being eon-
i. Organization of Ordained Ministers
The parties agree that during the tax years 1998 through 2000, the following members of the Masters family were ordained ministers of Foundation: Roy Masters, Ann Masters, David Masters, Dianne Masters Linderman, David Linderman, Elizabeth Diane Linderman, and Michael Masters. Def.’s Facts ¶ 22; Pl.’s Resp. to Def.’s Facts 17. The administrative record contains Certificates of Ordination issued by plaintiff. Admin. Ree. 2796-2801. Plaintiffs Certificates of Ordination are signed by Roy Masters as president and Ann Masters as secretary. Def.’s Facts ¶ 22; Pl.’s Resp. to Def.’s Facts 17. Roy Masters’s own Certificate of Ordination is signed by the following members of plaintiffs board: David Masters, Dianne Masters, Michael Masters, Lee Wen-delbo, and David Negron. Def.’s Facts ¶ 22; Pl.’s Resp. to Def.’s Facts 18. The record also demonstrates that the following individuals were ordained ministers at the time of the church tax inquiry: Albert Munoz, Mel Colton, Joel Moskowitz, Gene Takamine, Steven Kefalianos, Lee Wendelbo, Robert L. Dennis, Steven Stillwell, and Delores All-mond. Pl.’s Reply Exhibit (Ex.) 1 (Supplemental Affidavit of Roy Masters) at 16251-57, 16259 (Certificates of Ordination). Plaintiff has demonstrated that it has an organization of ordained ministers. Cf. Spiritual Outreach II,
j. Schools for the Preparation of its Ministers
Plaintiff does not have schools for the preparation of its ministers. See Pl.’s Mem. passim.
k. Ministers Selected After Completing Prescribed Courses of Study
Plaintiff has adequately demonstrated that its ministers are selected after completing prescribed courses of study. The parties agree that the ordination process consists of a personal tutelage under plaintiffs founder, Roy Masters. See Def.’s Facts ¶21; Pl.’s Resp. to Def.’s Facts 16. “There is no ‘set curriculum’ that sets out guidelines for the tutelage, and there is no set length of time [for the tutelage].” Def.’s Facts ¶ 21; Pl.’s Resp. to Def.’s Facts 17. A minister is ordained once Roy Masters is “ ‘personally satisfied’ that the individual understands and can explain the doctrines of [Foundation] at a level that allows [the individual] to adequately represent the Foundation.” Def.’s Facts ¶21; Pl.’s Resp. to Def.’s Facts 17. As a result, the tutelage can range from between a few months to several years of study. Def.’s Facts ¶ 21; Pl.’s Resp. to Def.’s Facts 17. In short, plaintiff relies on Roy Masters’s subjeсtive assessment regarding an individual’s qualification for ordination. While the facts here are unlike those in Foundation I, where the Tax Court found that Foundation’s ministers were ordained only after having completed a three-year apprenticeship under the tutelage of plaintiffs founder, Foundation I,
l. Religious Instruction for the Young
Plaintiff does not provide sufficient evidence to prove that it provides religious instruction for the young, whether through a church school or otherwise. See Pl.’s Mem. passim. Plaintiff does not provide a school for the religious training of the young. Pl.’s Mem. 12. Plaintiff contends that it meets this factor due to its relationship with Brighton Academy, and the religious nature of the education taught at Brighton Academy. See Pl.’s Mem. 11, 26. However, record evidence supports the opposite conclusion.
Brighton Academy is a non-denominational Judeo-Christian school. We do not teach any specific religion and we firmly believe that it is the family’s responsibility to establish and maintain it’s [sic] own religious belief system.
Def.’s Facts ¶ 24 (alteration in original); Pl.’s Resp. to Def.’s Facts 20. Plaintiff has not provided any evidence to show that the religious curriculum taught at Brighton Academy reflects Foundation’s practices or beliefs. See Pl.’s Mem. passim; Pl.’s Reply passim. In fact, plaintiff has not submitted any mаterials evidencing the school’s religious curriculum. See Pl.’s Mem. passim; Pl.’s Reply passim. Moreover, the school’s religious statement does not espouse the beliefs of Foundation or Roy Masters. See Admin. Rec. 7263 (Religious Statement of Brighton Academy). Instead, the statement states that Brighton Academy “do[es] not teach any specific religion.” Id. Plaintiff does not maintain a legal relationship with Brighton Academy. Admin. Rec. 7079 (plaintiffs statement that “Brighton Academy incorporated itself in 1991”). Although defendant does not contest that plaintiffs founder, Roy Masters, is a member of Brighton Academy’s board of directors, see Def.’s Mot. passim; Def.’s Facts ¶ 24, this, without more, is insufficient to establish that plaintiff meets this criterion. There is simply no evidence before the court to support the conclusion that plaintiff provides religious instruction for the young at Brighton Academy.
m. Regular Congregation
Plaintiff relies heavily on evidence that is either irrelevant or inadmissible hearsay in its attempt to prove that it meets this criterion. The portion of plaintiffs proffered evidence which can be properly reviewed by the court is insufficient to establish plaintiffs satisfaction of this factor.
Plaintiff cites to and appears to rely on the portion of the opinion in Foundation I in which the Tax Court found that plaintiff held regular services of regular congregations consisting of 50 to 350 persons at its Los Angeles, California, and Grants Pass, Oregon headquarters. Pl.’s Mem. 24 (citing Foundation I,
Plaintiff offers no evidence regarding the regularity, if any, with which the 50 to 350 congregants referred to in Foundation I, or any other established group of congregants, continued to practice together during the period of 1998 through 2000. See Pl.’s Mem. passim; Pl.’s Reply passim. On the contrary, the record makes clear that between 1998 and 2000, plaintiff оffered only twenty-one seminars at a variety of locations, five of which were in Oregon. Def.’s Facts ¶ 27; PL’s Resp. to Defi’s Facts 22. The record also establishes that during the period of 1998-2000, Roy Masters experienced poor health, Def.’s Facts ¶ 26; PL’s Resp. to Def.’s Facts 21, and that, during this time, Sunday meet
Plaintiffs responses to defendant’s church tax inquiry, although contained within the administrative record, consist of argument rather than fact. Those statements cannot therefore be marshaled to establish the facts. Plaintiff has not argued, and the court cannot determine, any exclusion from or exception to the hearsay rule under which these statements can be properly admitted as evidence before the court. Instead, they are out-of-court statements which plaintiff offers to prove the truth of the matters asserted. See Fed.R.Evid. 801(c). The court accordingly regards these statements as inadmissible hearsay, and does not consider plaintiffs arguments for which its only evidence is citation to the inadmissible portions of the administrative record. See, e.g., Pl.’s Mem. 24 (citing to a letter sent by plaintiffs counsel to defendant, at Admin. Rec. 229, 231-32, for the proposition that plaintiff held regular meetings in the years subsequent to the Tax Court decision in Foundation I).
Plaintiff.relies on statements contained in Roy Masters’s affidavit in order to prove that Foundation “continuously” held meetings at Tall Timber Ranch. See Pl.’s Mem. 24 (citing Affidavit of Roy Masters ¶¶ 4-5).
Plaintiff also relies on letters written by various individuals as “testimonial evidence of plaintiffs congregation.”
In order to continue serving you with radio programs and materials, we need your help to maintain our 501(c)[ (3) ] tax-exempt status.
Would you be so kind as to write us a letter briefly explaining the value of the radio programs and the materials you have received?
Please add that you consider us your church, one that you can attend in no other way by reason of your incarceration.
See Def.’s Facts U 36; Pl.’s Resp. to Def.’s Facts 29 (emphasis omitted). The parties agree that the majority of responses plaintiff received to its mailing indicated that the authors of the responses listened to plaintiffs radio broadcasts. Def.’s Facts ¶36; Pl.’s Resp. to Def.’s Facts 29. The responses received included the following statements made by the respondents: “ T consider [Foundation] my church.’ ” Def.’s Facts ¶ 37; Pl.’s Resp. to Def.’s Facts 30. “[Foundation] ‘is an organization with the intent of helping people in a non-profit manner. In other words a church.’ ” Id. “ ‘[Foundation] is the closest to church I can get.’” Id. “[Foundation] is ‘an alternative to church attendance.’ ” Id.
“On or about July 12, 2005, an e-mail message entitled ‘Message from Roy’ was sent from email@f[h]u.com.” Def.’s Facts ¶ 38; Pl.’s Resp. to Def.’s Facts 31. “[The e-mail] is addressed ‘Hello Friend’ and includes a description of how to unsubscribe at the end of the message.” Def.’s Facts ¶ 38; Pl.’s Resp. to Def.’s Facts 31. The message states in its entirety:
We are grateful for your continued financial support for our worldwide outreach.
In order to maintain the Foundation’s 501(e)[(3)] tax-exempt status (a church) we need your help.
Would you be so kind as to send us a short letter confirming the value you have received from our radio broadcasts and perhaps our Sunday sessions over the internet? Please explain why you consider the Foundation your church, one that you perhaps can attend in no other way — distance forbidding.
In this manner your donations will remain tax-deductible.
Please write soon.
Def.’s Facts ¶ 38; Pl.’s Resp. to Def.’s Facts 31. During the two months following the email message, Foundation received 686 emails and letters. Def.’s Facts 1138; Pl.’s Resp. to Def.’s Facts 32. Over thirty-eight percent of the respondents used postage-prepaid business reply mail envelopes provided by plaintiff for their resрonses. Def.’s Facts ¶38; Pl.’s Resp. to Def.’s Facts 32. Twenty-two percent of the respondents replied via email. Def.’s Facts II38; Pl.’s Resp. to Def.’s Facts 32.
Responses to the mailing referenced in Def.’s Facts ¶ 38 included the following statement: “I am writing in reply to the request for ‘help to maintain [Foundation’s] tax-exempt status.’ ” Def.’s Facts ¶ 39; Pl.’s Resp. to Def.’s Facts 33. “At least [eleven] of the replies specifically mention that they are writing in response to concerns about [Foundation’s] 501(e)(3) status.” Id.
Plaintiff has also submitted as evidence declarations that plaintiff prepared which are entitled “Declaration Concerning the Foundation of Human Understanding” and were signed by at least sixty-six people in March 2002. Def.’s Facts ¶ 34; Pl.’s Resp. to Def.’s Facts 27. “The pre-printed declarations include, among other things, the statement that Foundation is the signer’s ‘church’ and that [Foundation] has ‘sponsored, directed, or conducted sacred or spiritual activities in
The court views these letters, emails, and declarations as evidence that plaintiff has an established group of followers. A group of followers, however, is not synonymous with a “regular congregation.” Plaintiff has not adduced evidence that it has formal members. In fact, plaintiff states that it “has no formal membership” and “does not require that its congregants abandon affiliations with other churches or faiths.” Pl.’s Reply 12. While a formal membership is not a prerequisite to proving the existence of an established congregation, plaintiffs letters, without more, do not advance plaintiffs argument. Although the parties agree that plaintiff has “thousands of Foundation adherents or followers who practice the meditation techniques, attend seminars, [and] read the Foundation publications,” see Def.’s Facts ¶ 41; Pl.’s Resp. to Def.’s Facts 34 (emphasis omitted), plaintiff has not provided evidence as to the regularity, if any, with which its followers come together to practice. There is no evidence contained within the letters, emails, declarations, or, for example, in the form of records of attendance, that show a group of followers that regularly congregates in any form — whether virtually or in one another’s physical presence.
One of Roy’s major doctrines is “You don’t need a church.” Roy provides meditation exercises so the individuals can commune with God individually ... One of Roy’s basic premises is “Catch and Release”— come to seminars, learn the Foundation’s principles, and when you can do that, you don’t need Roy.
Def.’s Facts ¶ 35; Pl.’s Resp. to Def.’s Facts 28 (citing Admin. Rec. 5326, 5889).
The case law consistently concludes that “[w]hen bringing people together for worship is only an incidental part of the activities of a religious organization, those limited activities are insufficient to label the entire organization a church.” Foundation I,
Plaintiff argues that it provides regular religious services in a variety of forms including Sunday meetings, weddings, seminars, and radio and internet broadcasts. See Pl.’s Mem. 25; Pl.’s Reply 17-18.
Plaintiffs arguments suffer from two serious shortcomings.
First, its services in the form of Sunday meetings, weddings, and seminars, are not frequent enough to be characterized as “regular.” In Spiritual Outreach I, the Tax Court found that petitioner held a total of twenty religious gatherings during the two years at issue in the ease. Spiritual Outreach I,
Second, the court declines to characterize the radio and internet broadcasts as religious services. The court’s conclusion is consistent ■with the weight of persuasive ease law. At the time of the church tax inquiry, plaintiff owned “Talk Radio Network, which syndicates and distributes radio programming, including Roy Masters’s show ‘Advice Line.’ ” Def.’s Facts ¶ 8; Pl.’s Resp. to Def.’s Facts 7. “Plaintiff regularly broadcasts its ‘Advice Line’ radio call-in show on over 130 stations.” Def.’s Facts ¶ 8; Pl.’s Resp. to Def.’s Facts 7. “Plaintiff broadcasts to the public over the internet, and its broadcasts are available to listeners worldwide.” Joint Stip. ¶ 26. “Plaintiff broadcasts its message nightly, through a radio program in which Roy Masters and other of [p]laintiff s ministers speak and preach.” Joint Stip. ¶ 27. In advocating that the court consider plaintiffs radio and internet broadcasts as religious services, plaintiffs chief argument is that radio broadcasts “allow individuals to attend meetings
The weight of persuasive аuthority, further discussed below, holds that radio and internet broadcasts lack critical assoeiational aspects characteristic of religious services and are therefore instead properly regarded simply as broadcasting and publishing services insufficient to qualify a religious organization for church status. See, e.g., Chapman,
Moreover, plaintiff has not demonstrated that its radio and internet broadcasts accomplish the assoeiational experience supplied by churches which people physically attend, thereby distinguishing itself from litigants in prior eases. There is no evidence, for example, that plaintiffs adherents regard their experience while listening to plaintiffs broadcasts as a shared experience with other of plaintiffs followers, or as a communal experience in any way. See Pl.’s Mem. passim; Pl.’s Reply passim.
Plaintiff has presented evidence that it meets some, but not all, of the fourteen criteria. Therefore, here, as in Foundation I, viewed in light of the fourteen criteria alone, this case “presents a close question.” See Foundation I,
2. The Assoeiational Test
To qualify as a church, “an organization must serve an assoeiational role in accomplishing its religious purpose.” Church of Eternal Life,
During the tax years in question, Foundation’s activities were similar to the activities of those plaintiffs whose suits for church status were unsuccessful primarily because their activities lacked the assoeiational aspects which convinced the Tax Court to grant church status to Foundation in its prior declaratory judgment action. Foundation I, 88 T.C. at 1361 (finding the decision to grant church status to be a “close question”). Although not binding, the court finds persuasive the analysis of the Tax Court in Foundation I. In addition, subsequent Tax Court decisions which rely upon Foundation I clarify the factors which were critical to the court’s decision in Foundation I.
In explaining its rejection of plaintiffs declaratory judgment action in VL4, the Tax Court summarized the key characteristics exhibited by plaintiff in Foundation I which were sufficient to support recognition of church status: plaintiff conducted services “three to four times a week by ordained ministers for congregations of no less than 50 to 300 members[;] [Foundation] ministers were ordained only after having completed a three-year apprenticeship under the tutelage of [Foundation’s] founder and leader[;][and] Foundation operated a regular school for children in which the teaching of [Founda
In Spiritual Outreach I, the Tax Court entertained a declaratory judgment action in which petitioner contested the IRS’s initial determination that petitioner did not qualify as a church under I.R.C. §§ 509(a)(1) and 170(b)(l)(A)(i). Spiritual Outreach I,
In Church of Eternal Life, the court held that plaintiff failed the threshold assoeiational test based on a finding that petitioner’s principal activities included “the operation of a library containing about 4,000 items, bimonthly meetings, the distribution of litera-toe, the sale of merchandise and the publication of a newsletter.” Church of Eternal Life,
Here, as in First Church of In Theo, plaintiff is a “self-described non-membership organization” whose “religious purposes were accomplished through the writing, publishing, and distribution of religious literature rather than through the regular assembly of a group of believers to worship together.” First Church of In Theo,
Because plaintiff no longer exhibits the associational characteristics which were critical to convincing the Tax Court to grant church status to Foundation in 1987, what may have been a “close question” on the facts before the court in Foundation I is more readily determinable in this case.
The extent to which Foundation brings people together to worship is incidental to its main function which consists of a dissemination of its religious message through radio and internet broadcasts, coupled with written publications. “When bringing people together for worship is only an incidental part of the activities of a religious organization, those limited activities are insufficient to label the entire organization a church.” See Foundation I,
V. Conclusion
For the foregoing reasons, plaintiffs Motion is DENIED, and defendant’s Motion is GRANTED.
The Clerk of Court shall ENTER JUDGMENT for defendant. No costs.
IT IS SO ORDERED.
Notes
. Upon reviewing the parties’ briefing and possibly applicable rules, the court has concluded that it would be most appropriate to issue its decision in this action pursuant to Rule 52.1 of the Rules of the United States Court of Federal Claims (RCFC), which provides for judgments based on the administrative record "[w]hen proceedings before an agenсy are relevant to a decision in a case” before the court. RCFC 52.1(a). Accordingly, the court treats the parties' Motions as "Motions for Judgment on the Administrative Record” pursuant to RCFC 52.1(c). RCFC 52.1(c).
In Plaintiff's Motion for Reconsideration of [the] Court’s Order to Recharacterize Cross Motions for Summary Judgment RCFC 52 (plaintiff's Motion for Reconsideration or Pl.’s Recons. Mot.), plaintiff raises concerns regarding the standard of review applied in cases previously decided in the United States Court of Federal Claims pursuant to RCFC 52.1. Pl.’s Recons. Mot. V 10. However, plaintiff correctly notes that those cases were governed by standards established under "the [Administrative Procedure Act (APA)] or similar statutes,” and are therefore distinguishable from the present case, which is governed by the court's declaratory judgment jurisdiction pursuant to I.R.C. § 7428 (2006). Pl.’s Recons. Mot. ¶ 12. The court therefore does not perceive that a judgment under RCFC 52.1 affects the outcome the case. Under both RCFC 52.1 and RCFC 56, the standards of review and burdens of proof and persuasion are set by the terms of the applicable substantive law, which in this action comprises both statutory and case law. See RCFC 52.1 Rules Comm. Note (2006) ("The standards and criteria governing the court's review of agency decisions vary depending upon the specific law to be applied in particular cases.”); see also Anderson v. Liberty Lobby, Inc. (Anderson),
Accordingly, plaintiff’s Motion for Reconsideration is DENIED.
. Here, as in American Guidance Foundation, Inc. v. United States (American Guidance), plaintiff's tax-exempt status under the Internal Revenue Code (Code or I.R.C.) § 501(c)(3) is not at issue. Plaintiff's Memorandum in Support of Its Motion for Summary Judgment (plaintiff's Memorandum or Pl.'s Mem.) 13 ("[Defendant] concluded that [plaintiff] is a publicly-supported charity, exempt from taxation as an organization described in 26 U.S.C. § 501(c)(3).”); Cross-Motion of the United States for Summary Judgment and Brief in Support Thereof and in Opposition to Plaintiff's Motion for Summary Judgment (defendant’s Motion or Def.'s Mot.) 5 ("The Commissioner of Internal Revenue has ruled that [p]laintiff is a religious organization dеscribed in I.R.C. § 501(c)(3)”); Am. Guidance v. U.S.,
. Section 7428(a) of the I.R.C. establishes this court's declaratory judgment jurisdiction concurrent with the Tax Court and the District Court of the United States for the District of Columbia. I.R.C. § 7428(a) (2006).
. In pertinent part, I.R.C. § 509 provides:
(a) General rule. — For purposes of this tide, the term "private foundation” means a domestic or foreign organization described in section 501(c)(3) other than—
(1) an organization described in section 170(b)(1)(A) (other than in clauses (vii) and (viii))[.l
I.R.C. § 509(a)(1) (2006).
. In pertinent part, I.R.C. § 170(b)(1)(A) provides:
(b) Percentage limitations.—
(1) Individuals. — In the case of an individual, the deduction provided in subsection (a) shall be limited as provided in the succeeding sub-paragraphs.
(A) General rule. — Any charitable contribution to—
(i) a church or a convention or association of churches,
(ii) an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on,
(iii) an organization the principal purpose or functions of which are the providing of medical or hospital care or medical education or medical research, if the organization is a hospital, or if the organization is a medical research organization directly engaged in the continuous active conduct of medical research in conjunction with a hospital, and during the calendar year in which the contribution is made such organization is committed to spend such contributions for such research before January 1 of the fifth calendar year which begins after the date such contribution is made,
(iv) an organization which normally receives a substantial part of its support (exclusive of income received in the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501(a)) from the United States or any State or political subdivision thereof or from direct or indirect contributions from the general public, and which is organized and operated exclusively to receive, hold, invest, and administer property and to make expenditures to or for the benefit of a college or university which is an organization referred to in clause (ii) of this subparagraph and which is an agency or instrumentality of a State or political subdivision thereof, or which is owned or operated by a State or political subdivision thereof or by an agency or instrumentality of one or more States or political subdivisions,
(v) a governmental unit referred to in subsection (c)(1),
(vi) an organization referred to in subsection (c)(2) which normally receives a substantial part of its support (exclusive of income received in the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501(a)) from a governmental unit referred to in subsection (c)(1) or from direct or indirect contributions from the general public. ...
I.R.C. § 170(b)(1)(A) (2006).
. In Foundation of Human Understanding v. Comm'r (Foundation I), for example, the majority opinion found that the actual controversy requirement was met. Foundation I,
. In its Supplementary Brief of the United States on the Questions of Jurisdiction, Evidence, and Exhaustion of Administrative Remedies, Pursuant to the Order of April 9, 2009 (defendant's Supplemental Brief or Def.'s Supp. Br.), defendant opposes this court’s jurisdiction over plaintiff's action, contending that the legislative history of § 7428 reveals that Congressional intent was to provide a declaratory judgment remedy only for "controversies that place in question the deductibility of charitable contributions.” Def.'s Supp. Br. 13. However, the United States Court of Appeals for the Federal Circuit (Federal Circuit) has stated that this court's § 7428 declaratory judgment power is not to be narrowly construed so as to only apply in situations where an organization is in immediate danger of losing contributions. See Baptist Hosps., Inc. v. United States (Baptist Hospitals),
Defendant also argues that the plain language of § 7428 does not provide jurisdiction over plaintiff's action. Def.'s Supp. Br. 6-8. The court disagrees. Section 7428(a) states that "[f]or purposes of this section, a determination with respect to a continuing qualification or continuing classification includes any revocation of or other change in a qualification or classification.” I.R.C. § 7428(a) (emphasis added). Plaintiff's action is a revocation case, brought subsequent to defendant’s revocation of plaintiff's church status under § 170(b)(l)(A)(i). See supra Part I.B. The court finds that defendant's revocation resulted in a "change” in plaintiff's "classification” under § 509(a). See I.R.C. § 509(a).
Defendant urges that the plurality opinion finding jurisdiction in Foundation I not be followed, Def.'s Supp. Br. 15-33, and also contends that the United States Court of Appeals for the Fifth Circuit (Fifth Circuit) opinion in CREATE v. Commissioner (CREATE),
Neither party addressed the possible relevance of Baptist Hospitals to the question of jurisdiction in the course of their briefing or oral argument. See Pl.'s Mem. passim; Def.'s Mot. passim. At the conclusion of oral argument, the court ordered the parties to file supplemental briefing addressing the applicability of Baptist Hospitals to plaintiff's action. Order of May 27, 2009. In its Supplemental Brief of the United States on Jurisdiction and Baptist Hospitals, Pursuant to the Order of May 27, 2009 (defendant's
While Baptist Hospitals dealt primarily with the limitation contained within § 7428(b)(1) regarding standing to bring declaratory judgment actions under § 7428(a), it also dealt with the government’s contention in that case that there was no "actual controversy” as required by the language of § 7428(a). Baptist Hospitals,
Defendant also argues that the Federal Circuit’s discussion of the actual controversy requirement of 7428(a) is inapplicable in this case because it applies only to the first of two prongs of a jurisdictional analysis. Def.'s 2d Supp. Br. 5. However, defendant's argument suffers from its mischaracterization of the Federal Circuit’s jurisdictional analysis as a two-step process, beginning with an initial test regarding the presence of an actual controversy, followed by a second step determining "whether that controversy falls under one of the jurisdictional grants of section 7428(a)(1).” Id. It appears to the court that both Baptist Hospitals, and the Friends decision upon which the Federal Circuit relies in Baptist Hospitals, engage in a single analysis of whether defendant’s actions are sufficiently adverse to meet the "actual controversy” requirement contained within the language of section 7428(a) as a prerequisite to establishing declaratory judgment jurisdiction. See Baptist Hospitals,
. Several declaratory judgment cases discuss the requirement for this court to follow the Tax Court’s lead on burden of proof rules in declaratory judgment actions. See, e.g., New Dynamics Found. v. United States (New Dynamics), 70 Fed.Cl. 782, 799 n. 23 (2006) (stating that the legislative history of § 7428 "indicates that ‘burden-of-proоf rules are to be developed by the courts under their rule-making powers,’ [and] ... that ‘[i]nsofar as is practical, those rules should conform to the rules that the Tax Court develops with regard to declaratory judgment suits as to retirement plans, under section 7476’ ” (quoting S. Rep. 94-938(1), at 588, U.S.Code Cong. & Admin.News, 1976, pp. 3438, 4012) (alterations in original)). As in New Dynamics, the court need not resolve the extent to which the Tax Court’s rules should impact a declaratory judgment proceeding in this court because here, as in New Dynamics, there appears to be no dispute that the burden is on plaintiff to demonstrate that defendant’s revocation was erroneous. New Dynamics,
. The oral argument held on May 27, 2009 was recorded by the court's Electronic Digital Recording system (EDR). All times noted in this Opinion refer to the EDR record of the oral argument.
. Although the scope of review in declaratory judgment actions involving a taxpayer's challenge to an initial determination by the IRS is generally confined to the administrative record, supplementation of the administrative record may be proper when good cause is shown. Peter H. Winslow, T.M.P. 885-2nd: Exempt Organizations — Declaratory Judgments (Exempt Organiza
. Plaintiff argued in briefing that activities outside the scope of the tax years at issue should be reviewed by the court. PL's Mem. 3. Plaintiff did not support its argument with case law, but instead rested its argument on one sentence in a treatise. Pl.'s Mem. 3 (quoting Exempt Organizations at V(D)(2) (“[Despite the holding in Synanon Church v. United States (Synanon),
. In De La Salle Institute v. United States (De La Salle), the court discussed the legislative history of I.R.C. § 170. De La Salle,
. Federal district courts have also applied the IRS's fourteen criteria in cases involving claims under statutes other than I.R.C. §§ 509(a)(1) and 170(b)(l)(A)(i). See, e.g., Goetz v. Greater Ga. Life Ins. Co.,
.In plaintiff’s Memorandum, plaintiff treats the court's consideration of “any other facts and circumstances,” Foundation I,
. In the choice of criteria deemed to be of "central importance,” it is possible to hear echoes of the concerns which informed the establishment of Protestant institutions in the colonial and early national periods, including the founding of Harvard University, “ ‘to advance Learning and perpetuate it to Posterity; dreading to leave an illiterate Ministry to the Churches[,]’ " Samuel Eliot Morison, Three Centuries of Harvard 1636-1936 at 23 (Harvard Univ. Press 1936) (quoting New Englands First Fruits 23 (digitized by Google 2007) (London, printed by R.O. and G.D. for Henry Overton 1643), and the Sunday school movement, see generally Robert W. Lynn
. The majority opinion in Chapman v. Commissioner (Chapman) defines the term church as synonymous with the concepts of "denomination” or "sect.” Chapman,
. In Lutheran Social Service of Minnesota v. United States (Lutheran Social Service), the United States Court of Appeals for the Eighth Circuit applied the fourteen criteria to determine church status under § 6033(a)(2)(A)(i) after observing, “Section 6033 does not define the term 'church,' and the Treasury regulations to that section make no attempt to clarify the term.” Lutheran Social Service,
. Defendant objects to plaintiffs use of the phrase "otherwise present and discuss," contesting that it is vague. See Defendant’s Response to Plaintiff's Proposed Findings of Uncontroverted Fact (defendant's Response to plaintiff's Facts or Def.'s Resp. to Pl.'s Facts) 15. The court does not perceive the basis for defendant's objection. "[P]resent[ing]” and "discussfingl” are well understood to refer to specific activities. If defendant’s objection is to the term “otherwise,” it is clear from the titles of plaintiff's publications that there are many subjects that could be addressed.
.Defendant argues against the sufficiency of statements contained in Roy Masters's affidavit. While the court agrees that plaintiff presumably could have marshalled stronger evidence in support of the arguments contained throughout its briefing, the court nevertheless relies on portions of Masters’s affidavit in this Opinion which are based on the affiant's personal knowledge, and set forth facts admissible as evidence at trial. See 11 James Wm. Moore, Moore's Federal Practice (Moore's Federal Practice) § 56.14[l][d), at 56-162.1-163 (3d ed.2004) ("[A]t the summary judgment stage, the focus is not on the form of the evidence as it is presented in an affidavit, but rather, whether at trial the matter stated in the affidavit would constitute admissible evidence. To be acceptable at the summary judgment stage, the evidence presented in the affidavit must be evidence that would be admissible if presented at trial through the testimony of the affiant as a sworn witness.”). The court also notes that it does not rely on the portions of Masters's affidavit which the court concludes would be inadmissible at trial for a variety of reasons including statements of legal conclusions, facts which plaintiff has not established are based on the affiant's personal knowledge, and statements that contain conclusory allegations or speculation. See id. § 56.14[l][d], at 56-164 ("[A]n affidavit that only contains facts that could only be presented at trial through evidence that violates tire proscriptions against hearsay and statements made without personal knowledge should not be admitted at the summary judgment stage.”); id. § 56.14[l][d], at 56-166.2 ("It is within the court's discretion to strike portions of an affidavit _ and to preserve the portions that are competent.”).
. Defendant argues that the letters to which Roy Masters's affidavit refers are inadmissible. Def.’s Mot. 25-30. The court regards the letters as admissible, even though not in the form of affidavits, because the letters can reasonably be converted into admissible evidence at trial through the testimony of their authors. See 11 Moore's Federal Practice § 56.14[l][d], at 56-164 ("[I]f an affidavit points to the testimony of another witness or source of competent evidence, this may demonstrate the existence of sufficient evidence available at trial to defeat the summary judgment motion”) (citing Celotex v. Catrett,
. Plaintiff’s citations to portions of the administrative record appear to be in error. In any case, the court cannot discern how those portions of the record support plaintiff's contention that it
. Plaintiff has provided records of attendance from some its meetings. Pl.'s Reply Exhibit (Ex.) 1 (Supplemental Affidavit of Roy Masters) (attaching Admin. Rec. 16002-16230). This evidence, however, cannot be deployed to prove that plaintiff meets this criterion. Most importantly, the records of attendance span years that are outside of the scope of evidence at issue in this case. See supra Part III.B.4. Further, the attendance records are primarily from the years 2005 and 2006, at which time the church tax inquiry was complete, and defendant had already issued its final adverse determination. See supra Part I.B (finding that defendant issued its final adverse determination on June 8, 2004). The attendance records are therefore unpersuasive regarding plaintiff's activities during the time period of defendant’s audit. Here, as in First Church of In Theo v. Commissioner (First Church of In Theo), plaintiff provided evidence that it has a regular congregation only after plaintiff has been put on notice regarding defendant’s revocation of plaintiff's church status. First Church of In Theo,
. Defendant contends that there is an absence of evidence proving that the nature of plaintiff’s services are religious. See, e.g., defendant's Reply for the United States in Support of Its Cross Motion for Summary Judgment and in Opposition to Plaintiff's Motion for Summary Judgment (defendant's Reply or Def.'s Reply) 19 (“[T]here is a dearth of evidence that [plaintiff's radio] broadcasts are religious.”); Def.’s Mot. 37 ("[P]laintiff offers no evidence that ... its weddings are conducted as those of a church would be....”). The court disagrees and finds that defendant is asking the court to assume the question in issue: what a "church” wedding looks like. The evidence in the record is sufficient to support the conclusion that plaintiff, Foundation of Human Understanding (Foundation), holds religious meetings and that its founder, Roy Masters, disseminates a message based on plaintiff's principles and beliefs. See, e.g., Admin. Rec. Ex. 320B (compact discs containing recordings of Roy Masters’s various radio broadcasts). Plaintiff describes the activities that take place during its Sunday meetings as follows:
A typical service at the Tall Timber Ranch consists of a minister of the Foundation, most often Roy Masters, lecturing to a group of individuals from 10 to 30 in number concerning meditative practices, good and evil, Adam and Eve, societal hypnosis, man/woman relationships, alcoholism, child abuse and a wide variety of other topical religious themes. The minister in charge may feel inspired to perform ritual exorcisms for those individuals who are perceived by the minister to be possessed of evil influence. The service/seminar might last from one hour to three hours per session. A seminar is being held, for example, over Thanksgiving, 2001 at the ranch. The seminars/services also take place in various cities according to the travel schedule of Roy Masters or the other Foundation ministers.
Def.'s Facts ¶ 19; Pl.'s Resp. to Def.’s Facts 15. In addition, it is uncontested that plaintiff is a religious organization. Def.’s Mot. 5 (“The Commissioner of Internal Revenue has ruled that [pllaintiff is a religious organization described in I.R.C. § 501(c)(3)”).
. In response to the court’s request for additional briefing in its May 18, 2009 Order, dkt. no. 72, Plaintiff’s Supplemental Brief on Issues Raised by the Court (plaintiff's Supplemental Brief or Pl.’s Supp. Br.) urges that plaintiff’s case is similar to the facts presented in Purnell v. Commissioner (Purnell),