1130 Seventeenth St., NW Suite 400 Washington, DC 20336
Re: Church of Scientology International 4233 Fountain Ave.

Los Angeles, CA 90029 Dear Mr. Spring:

This is to summarize the telephone conversation you had today with Marc Owens, Technical Advisor to the Director, Exempt Organizations Technical Division.

In his conversation with you, Mr. Owens stated that the Internal Revenue Service is actively considering the information that has been submitted in support of the application for recognition of exemption under IRC 501(c)(3) of the Church of Scientology International and appreciates the cooperation shown by the applicant. However, Mr. Owens also noted the extensive history of prececessor organizations and related individuals as described in Founding Church of Scientology v. US, 412 F. 2d 1197 (Ct.

Cl, 1969), cert. den. 397 US 1009 (1970), Church of Scientology of California v. Armstrong, No. C420153 (Cal. Super. Ct., July 20, 1984), Founding Church of Scientology of Washington, DC v. Director, FBI, 802 F. 2d 1448 (DC Cir. 1986), cert. den. 56 USLW 3231 (Oct. 6, 1987), and Church of Scientology of California v. Commissioner, 83 TC 381 (1984), 823 F. 2d 1310 (9th Cir. 1987). In view of this history, additional information is necessary for the Service to be assured concerning the organization's maintenance of proper books and records that would fairly reflect its income, assets, and expenditures. In this regard, the Service proposes to meet with representatives of Church to discuss a mutually agreeable solution addressing this concern. Friday, December 4, 1987, at 9:30 a.m.

in Room 6411 of the IRS National Office has been set as the date, time, and place for the meeting. It is anticipated that you would provide us with any and all independently audited or auditable financial statements.

The Service would then promptly proceed to examine them to assure that the exemption requirements have been met. With the continued cooperation of the organization, the examination could be completed within six months.

We understand that you will shortly submit further information in support of your position that there was no private benefit or inurement of net earnings to L. Ron Hubbard. In addition, we expect that you will provide further information about several international Scientology organizations about which you recently informed us.


- 2 - Thomas C. Spring, Esq.
We trust that you will give careful consideration to this matter as the Service believes that it represents a reasonable approach to establishing that the Church's operations further exempt purposes exclusively.

Please contact Mr. Friedlander at (202) 566-4756 when you have completed your consideration.

Sincerely, {STAMPED} (signed) Milton Cerny Milton Cerny Chief, Exempt Organizations Rulings Branch

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