High Court Rules in Scientology Case

The U.S. Supreme Court, in a partial victory for the Internal Revenue Service in its legal battles with the Los Angeles-based Church of Scientology, ruled 8 to 0 Wednesday that judges may privately examine communications between lawyers and clients to determine whether such information should be turned over to the government.

But the justices, in a victory for the church--with headquarters and much of its membership in Los Angeles--also upheld a ruling that permits judges to prevent information sought by the IRS from being turned over to other government agencies.

The government, which has had numerous legal battles with the Scientologists, began an investigation in 1984 of the tax returns of the church’s founder, L. Ron Hubbard. He died Jan. 24, 1986.

The IRS said it suspected that millions of dollars in church funds were transferred to Hubbard in the late 1970s and early 1980s in a scheme to protect the church’s tax-exempt status and avoid paying taxes.

The IRS issued a summons in October, 1984, for 13 confidential documents held by a California state court in connection with a private lawsuit involving the church.

A federal judge ruled that five of the documents should be turned over to the IRS, but only on the condition it not disclose the contents to any other government agency except in connection with a criminal tax prosecution.

That part of the judge’s ruling was upheld by Wednesday’s Supreme Court vote.