Herbert W Armstrong

   Section 9505 applies to charitable trusts, but does not mention churches. The Attorney General contends that churches are "charitable trusts, It but it is the contention of the taxpayers' lawsuit that IF 9505 is applied so as to include churches, the section is unconstitutional and in violation of the first amendment.

   God's Church, as are many other churches in California, is incorporated as a "non-profit corporation" in order to carry on its business affairs and to enjoy the appropriate tax-exempt status of a church. It has always complied with the applicable non-profit corporation laws of California. The taxpayer's attorney pointed out to the court that profit-making corporations — and churches that have never been incorporated — do not experience such excessive scrutiny, and that there is no reason to assume that incorporated churches need more watching than other entities.

   The attorney for the taxpayers called the court's attention to the U.S. Supreme Court decision regarding Lemon vs. Kurstman. In this 1971 case a parochial school welcomed the prospect of state aid. The church-related school was willing to meet the state's condition for receiving the much needed funds which was a subject-to-audit rule. Even though the church school was willing, the Supreme Court said, "NO, this arrangement will mean excessive entanglement between government and religion. The Supreme Court ruled that this was unconstitutional and that the state should not be examining the parochial school's financial records to determine which expenditures were religious and which were secular.

   The judge asked if the members bringing this lawsuit were really trying to protect their Church. The attorney replied, "Yes, and themselves." Members have rights of privacy to protect. For example, there would be no privacy protection of their correspondence with the Church concerning spiritual matters if they were exposed to the state's examination and confiscation of anything they wanted.

   Judge Foster denied the taxpayer's request for a preliminary injunction, indicating that he did not want to interfere in court proceedings of another department. He felt that the Church had not stressed this matter in its own proceedings thus far and indicated that is where he would like to see it addressed. It is yet to be determined by the taxpayer's attorney just what further action can and should be taken regarding their original suit.