UNITED STATES of America and Melvin Blough, Internal Revenue Agent, Internal Revenue Service, Petitioners, v. CHURCH OF SCIENTOLOGY FLAG SERVICE ORG., INC., and Mary Story, Secretary and Director, Respondents. No. 89-488-MISC-T-15C. United States District Court, M.D. Florida, Tampa Division. Dec. 15, 1989. ORDER CASTAGNA, District Judge: *1 This is a petition brought by the Internal Revenue Service to enforce a tax examination summons directed against the Church of Scientology Flag Service Org., Inc., and Mary Story, the Church's Secretary and Director. The Court has duly considered the issues presented by the parties, and has determined that this matter may be considerably streamlined by settling the several issues of law over which the parties sharply disagree. The arguments presented by the lengthy memoranda in the court file may be organized into six categories of dispute, and the Court will address each in turn. I. Inquiry Notice Under the Church Audit Procedures Act, I.R.C. s 7611 (1988), the IRS may begin a tax inquiry of a church only after it has complied with the requirement of inquiry notice. Inquiry notice is written notice to the church of the beginning of the tax inquiry, and must include an explanation of the concerns which gave rise to the inquiry, the general subject matter of the inquiry, and the applicable law. I.R.C. s 7611(a)(3) (1988). Respondents contend that the inquiry notice sent in this case failed to adequately explain, in sufficient detail, the subject matter of the inquiry or the concerns giving rise to the inquiry. Respondents also argue that the notice itself must demonstrate that the Service has before it evidence sufficient to support a reasonable belief that the church may not be exempt. The church tax inquiry letter sent to the Church, a copy of which is in the record, complies fully with the requirements of the Code. The letter indicates that the Service believes that the Church of Scientology Flag Service Org., Inc., may not be a tax exempt entity under I.R.C. s 501(c)(3) because of the Church's substantially commercial purpose and because it may be operated for the personal inurement of private parties. The letter thus sufficiently apprises the Church of the subject matter of the inquiry and the reasons therefore. The subject matter of the inquiry is clearly stated to be to determine whether the Church is not tax exempt, and two possible grounds for nonexemption are given. The notice sent also adequately apprises Respondents of the concerns giving rise to the inquiry. Respondents are informed by the inquiry that the Service has information that the Church is party to various agreements regarding certain trademarks, copyrights, patents, and trade names; and that these agreements require the Church to operate in a manner inconsistent with exempt status. The inquiry notice further allows that the Service has information supporting a reasonable belief that the Church is operated for a substantial nonexempt purpose, and that it is operated for the personal inurement of private persons. The notice makes reference to other Court cases as being part of the information from which the Service's beliefs are derived. The inquiry notice fully complies with the requirements of the Code. II. Reasonable Belief Respondents desire that this Court reexamine the reasonableness of the Service's determination that the Church may not be exempt. The Code clearly provides to the contrary. I.R.C. s 7611(e)(1)(2) allows a church to litigate only the Service's noncompliance with the notice requirement, the conference requirement (discussed below) or the approval requirement (which does not apply here). Other than these, "[n]o suit may be maintained, and no defense may be raised in any proceeding ... by reason of any noncompliance by the Secretary with the requirements of this section." Id. As the Code unambiguously provides that churches may not challenge the reasonableness of the Services belief that a tax examination is appropriate as a defense in any proceeding, the Court need not consider this question. III. Conference Requirement *2 The Service must also offer to have a conference with the church "in order to discuss, and attempt to resolve, concerns relating to such examination...." I.R.C. s 7611(b)(3)(A)(iii). The Service made the required offer in the notice of examination sent to the Church after the inquiry notice, as mandated by the Code. Id. The record also reflects that a conference was held. Respondent's claim that the Service did not participate at the conference in good faith, but instead were merely going through the motions rather than engaging in a meaningful attempt to resolve their concerns. Whether or not Respondent's factual claims are accurate, the Code does not impose any good faith or sincerity requirement on the Service. The Service offered a conference. A conference was held. The law requires nothing more. It is for the Congress, and not the Courts, to impose any further duties on the Service regarding the conference requirement. IV. Scope of the Summons The Service may examine church materials only to the extent necessary to determine the Church's tax status. I.R.C. s 7611(b)(1) (1988). Absent a finding that each of the items sought in the summons is necessary for the Service to determine the tax status of the Church, the Court cannot enforce the summons. United States v. Holmes [80-1 USTC P 9328], 614 F.2d 985 (5th Cir.1980). See also, United States v. Church of World Peace [89-2 USTC P 9428], 878 F.2d 1281 (10th Cir.1989). The question of whether each of the items sought is necessary will be referred to the United States Magistrate for resolution. V. Discovery By Respondent The parties also disagree as to whether the Respondents should be allowed to depose various members of the Service in preparation of showing that the Service has initiated this tax examination in bad faith as part of a nationwide conspiracy to discredit and destroy the Scientology movement. This question will also be referred to the United States Magistrate. VI. Constitutional Claims Respondent's complain that constitutionally protected free association and the Establishment Clause would be violated by requiring the information sought to be turned over. These complaints are without merit. If the Service shows that the information sought is necessary to determine the Church's tax status, this would constitute a compelling interest sufficient to override any competing interest the Church or its members may have in keeping such information away from the government. Respondent's related claim that turning over information necessary to determine tax status constitutes excessive entanglement has been rejected by the courts. Holmes, 614 F.2d at 989-990. It is ORDERED: 1. This cause is referred to the United States Magistrate to resolve whether the items sought by the Service are necessary to determine the Church's tax status, and whether the Church should be allowed discovery to show that the Service is proceeding in bad faith. All other questions which have been raised by the parties are resolved as provided in this Order. *3 2. The show cause hearing, scheduled for December 20, 1989, is canceled.