A coalition of conservatives yesterday denounced as a threat to religious freedom proposed Internal Revenue Service regulations that would end tax exemptions for private schools judged racially discriminatory.
The coalition, consisting of representatives from the American Conservative Union and the National Christian Action Coalition, said the new rules would allow the government to tax private religious schools found in violation of government desegregation standards.
"The potential consequences of this are frightening," said the Rev. Robert Billings, chairman of the Christian action group. "If you can tax private religious schools, why not tax churches?
Private schools with stated racially discriminatory policies, including those with religious affiliations, have been barred from enjoying tax exemption privileges since 1970. But IRS officials said some of those schools have managed to keep their tax-exempt status despite court findings that they discriminated on the bases of race.
The new regulations, proposed last Aug. 21, would deny a tax break to any private school found by a court to be racially discriminatory. They would also allow the IRS to scrutinize more closely private schools that "were formed or substantially expanded at or about the time to desegregation of public schools in (a) community, and that do not have significant minority enrollment."
The ACU chairman, Rep. Philip M. Crane (R-Ill.), who is also an announced presidential candidate for 1980, said yesterday that the new IRS rules are self-defeating "because they would promote the very discrimination they seek to end."
"I personally loathe discrimination on the basis of race," Crane said. "Accordingly, I have no sympathy whatever for the blatantly discriminatory recruitment guidelines proposed by the IRS."
He accused the agency of casting itself "in the role of a social engineer, a role clearly not intended for it."
Crane and his supporters claimed they have received 60,000 letters protesting the IRS proposals. They say they are planning to make the "dangerous" new guidelines a major political issue, one that could bring 150,000 similarly concerned Americans to Washington for a planned mass demonstration.
If all else fails, the conservatives say they will challenge the regulations in court.
In a speech last Thursday at Stony Brook, N.Y., Stuart E. Seigel, chief counsel for the IRS, said: "The service is not attempting to establish social policy or to regulate private education in the United States.
"Our role in this area is thrust upon us by our responsibility to monitor the tax-exempt status of charitable organizations. Our role is to reflect, not to create, public policy."
The IRS plans to hold hearings on its new proposals Dec. 5.