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The various characteristics of the schools make them a 'powerful vehicle for transmitting the Catholic faith to the next generation.' This process of inculcating religious doctrine is, of course, enhanced by an impressionable age of the pupils, in primary schools particularly. In short, parochial schools involve substantial religious activity and purpose." [Footnote omitted]

"The substantial religious character of these church-related schools give rise to entangling church-state relationships of the kind the Religion clauses sought to avoid.

Accord, National Labor Relations Board v. Catholic Bishop of Chicago, 99 S. Ct. 1313 at 1319 (1979). Parochial schools, regardless of the religion involved, are substantial religious activities, even though they may be teaching secular subjects in part, and even though they may be using text books like those used in public schools; thus, Section 7605(c) bars the IRS from any examination of them. No church school should comply with Rev. Proc. 75-50 or any new procedure because to do so would encourage further unlawful activity by the IRS.

There are no criteria, statutory or administrative, which can dictate the racial composition of the congregation of a church, its ministry or its employees. Accordingly, a church will remain a church, and exclusively religious, for purposes of Section 501(c)(3) regardless of those conditions. It is no function of government to tell any church what its ministry may be; nor is it government's function to dictate to the congregation how it should practice its religious activities relating to parochial schools. The Congress has specifically provided exceptions for churches which do not apply to any other institutions.

In closing, your attention is directed to the decision of First Unitarian Church v. Los Angeles, 357 U.S. 546, in which the State of California required an oath from the church hierarchy stating that the church membership would not overthrow the government. Failure to execute the oath meant that the church would not be entitled to tax exemption. Mr. William O. Douglas, an eminent civil libertarian, stated as follows:

"The principles, moral and religious, of the First Unitarian Church compel it, its members, officers, and ministers, as a matter of deepest conscience and belief, to deny power in the state to compel acceptance by it or any other church of this or any other oath of forced affirmation as to church doctrine, advocacy or beliefs. "We stated in Girouard v. United States [citation omitted] the test oath is abhorrent to our tradition.' See American Communications Association v. Dowd [citation omitted]. The reason for that abhorrence is the supremacy of the conscience in our constitutional scheme. As we stated in West Virginia Board of Education v. Barnett [citation omitted] 'if there is any fixed star in our constitutional constellation, it is that no official, high or petty, can prescribe what shall be orthodox in politics, nationalism, religion, or other matters of opinion or for citizens to confess by word or act their faith therein.'

"There is no power in our government to make one bend his religious scruples to the requirements of this tax law."

That statement concerning the conscience of churches to carry forward their own religious activities as they conceive them without regard to Government dictates, remains as true today as when it was written by Mr. Justice Douglas in 1958.

U.S. SENATE,

GRACE MEMORIAL CHURCH, Colmar Manor, Md., April 17, 1979.

Committee on Finance, Subcommittee on Taxation and Debt Management,
Dirksen Senate Office Building, Washington, D.C.

DEAR SENATORS: I strongly oppose the revised guidelines of the IRS on the tax exempt status of private schools. I also strongly support Senate Bill 103 and 449 and urge that these important bills be passed. Here are my reasons.

1. The 1978 resolution passed by the independent fundamental churches of America at its annual convention: (The I.F.C.A. is an organization of 1,400 ministers and over 1,000 churches)

Resolution on christian schools:

Whereas, the Word of God teaches that the home is the basic unit of society, and that God has entrusted to parents the responsibility for the education of their children (Deut. 6:6, 7; Eph. 6:4); and

Whereas, state controlled education has become increasingly humanistic and otherwise contrary to a Scriptural philosophy of life; and

Whereas, the Christian school movement seeks to restore the cooperation between the church and the home in education as was the pattern at the time of the founding of our country; be it therefore

Resolved, That the Independent Fundamental Churches of America, meeting at its 49th annual convention in Estes Park, Colorado, June 24-30, 1978, urge its constituency to support, by whatever means and abilities God has given them, the Christian school movement in its effort to establish a biblical base of education; and be it finally

Resolved, That we strongly protest the encroachment upon this movement by government agencies which seek to hinder and unnecessarily control its ministry. 2. The insensitivity of the IRS.

I heard 116 witnesses last December with 100 in opposition, especially over the issue of 'reviewable' schools. The IRS News release IR-2091 stated that the I.R.S. issued the revised guidelines after considering public comments. That simply is a lie. With 5-1 opposition, the I.R.S. only reworded its original guidelines. It does not reflect the majority of those at the December hearings. They simply have not paid attention to their own hearings.

3. Contradictions and inconsistencies in the IRS revised proposal:

Their definition of a nondiscriminatory policy is stated in Section 3.01 "the school admits the students of any race . . . does not discriminate on the basis of race." In order to convince the IRS of nondiscrimination, the 'reviewable' school must actively and vigorously recruit minorities (4.03-1) and they must convey clearly to the affected minority community that they are welcome at the school (Sec. 4.03). The IRS does not know the basic difference between 'any race' and 'all races' or 'every race'.

Many of our schools are in metropolitan areas with many minority and ethnic groups. An affected minority could be inadvertently omitted, such as a small Korean community or perhaps Vietnamese refugees who recently moved into our community. The IRS demand would force private schools to go on a continual safari for minorities in order to keep their tax exemption.

Racial nondiscrimination and racial balance are not the same. The IRS contradicts its own guidelines. But the future status of our private schools are held in the balances by these very conflicting statements.

Since the IRS contradicts itself, I recommend the guidelines be killed. If they are as inefficient in carrying out these guidelines as they were in drafting them, we are in serious trouble.

4. The principle of precedent:

The IRS has referred to various court cases affecting taxation of private schools. The IRS expressed a need for stronger and more forceful guidelines. If these guidelines are enforced, we will witness increasing stipulations until we are regulated to death. The principle of precedent is so strong that the IRS has shown that it doesn't know where to stop.

Based on what I heard at the December hearings and what I read in the revised guidelines, I simply and clearly do not trust the IRS. They told us in December that we are listening to you' and then they deliberately ignored our comments. The IRS has shown that they do not value our statements, especially the 80 percent who oppose their guidelines.

One example of precedence is the 20 percent of the minority percent in public school. No one at any time from the IRS has guaranteed that the percentage would never be raised. A spokesman for the NAACP Legal Defense and Education Fund called the 20 percent 'tokenism'. A spokesman for the American Civil Liberties Union said the percent should be revised upward. Will we be forced to come to Washington again, when the IRS moved upward to 30 percent, 50 percent, 75 percent? What would stop them from demanding equal percentage in private schools as in public schools? And after they have forced this percentage on the Christian School, will the Church be next?

5. Separation of church and state:

The IRS is guilty of overstepping the church-state issue in attempting to control the things that are of God and the Church. The Church-School is a positive and practical part of the ministry of the Church. They are one and the same and must remain so.

Those of us in Christian private schools believe that God has called us to train up our children in the nurture and admonition of the Lord. Our very reason for existence comes from the Bible. We are following orders from the Lord and we intend to carry out those orders, whatever the cost.

6. Unsettled conditios in the public schools:

Our public schools are in shambles. Test scores are down, morality is down but crime is up and the cost of this to the tax payer is astronomical. There is a battle raging in Prince Georges County, Md., between the recently elected County Executive Larry Hogan and the County School Board over expenses. The School Board has not gotten the message that reduction of taxes also includes the school budget.

We also have a battle in Prince Georges County between the local NAACP and the national NAACP over bussing and desegregation and the school board attorney. Does the Christian School wait until this is settled and the IRS decides whether or not our expansion is related to public school desegregation? According to the Washington Post, December 17, 1978, Prince Georges County had 25% black when school desegregation started in 1972 but now the percentage of blacks is 44%. If we have another desegregation plan, will our christian schools be 'reviewable' for several years because we have 'substantially' increased during that time?

The total public school population in Prince Georges County has decreased so much that some public school facilities are being closed. IRS revised guideline Sec. 3.03(b) 10 especially deals with using former public school facilities and public school desegregation. Would we be suspect because we might use former public school facilities?

The biggest reason for the unsettled condition in the public school system is its philosophy of education, which is humanistic, evolutionary, man-centered and permissive, leaving the Lord out of education. The Christian school is God-centered and Christ honoring.

The public school seeks to impart information without regard for God. The Christian School seeks to: (1) lead the student to a salvation relationship with Jesus Christ, John 1:12, Rom. 10:9-10, 13; 2. endeavor to develop the student into a disciple of Jesus Christ, Rom. 8:29; 3. train the student in academic disciplines, such as math, science, history, languages, economy, government, as viewed from a Biblical perspective, Proverbs 1:7-8.

The IRS has gotten into the educational battle, which is none of its business. We will resist the IRS because they divert us from our primary task, that is, train our children in the fear of the Lord and the love of Jesus Christ.

7. Cost and financial considerations:

The Christian schools save the government as much as $30 billion annually, according to Dr. Tim LaHaye (Journal-Champion, Lynchburg, Va., April 6, 1979, page 2). They are training young people with quality education while saving the government billions of dollars annually. It costs the government over $1,000 per pupil per year in Prince Georges County, Md. We do not ask for your charity, but we want the IRS out of our business.

8. Conflict between IRS policy and private school guidelines:

The IRS is telling the private school how to run its school. We believe that if the IRS spent more time minding their business instead of OUR business, we all would benefit.

9. Support for S. 103: IRS may not implement certain proposed rules concerning private schools and discriminatory policies.

This Senate Bill is needed in order to stop the IRS. I strongly feel that the IRS is incompetent. Any bureau that could listen to as much testimony as the IRS did in December and then come out with such faulty concepts a few months later has clearly demonstrated that it is inept at facing and solving important matters. 10. Support for S. 449: Tax exemption and allowance of a deduction for contributions to such organizations shall not be construed as the provision of Federal assistance.

The issue is simply this: does everything belong to the government? Is everything not taken considered as assistance? What ever happened to the freedom to have and to hold private property? Instead of government OF the people, FOR the people, and BY the people, we have government OVER the people and IN the people's checkbooks.

We plead with you our beloved elected senators to hear our case. The IRS in recent months has proven to be hardened and insensitive to our position. We want you to support and pass S.103 and S.449 before more damage is done by the IRS. Please do not underestimate the depth and strength of our God-given convictions. Thank you for hearing these views opposing the IRS and taxation of private schools.

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DEAR COMMISSIONER KURTZ: I request permission to speak at the public hearing scheduled for Dec. 5, 1978 concerning the Proposed Revenue Procedure on private

tax-exempt schools. I wrote to you on Oct. 18, 1978, voicing my strong opposition to this proposal. Therefore, I believe that I qualify according to the rules published in the Federal Register, Oct. 18, 1978.

I plan to use all 10 minutes alloted to me, covering my list of points. Here is the outline and contents of the remarks I plan to make.

Thank you for allowing me this opportunity to voice my opposition to the IRS Proposed Revenue Procedure on Private Tax-Exempt Schools (Federal Register, Aug. 22, 1978, Vol. 43, Nov. 163, page 37296). The following are my reasons for opposing this suggested plan.

1. The 1978 resolution passed by the Independent Fundamental Churches of America at its annual convention:

Resolution on christian schools:

Whereas, the Word of God teaches that the home is the basic unit of society, and that God has entrusted to parents the responsibility for the education of their children (Deut. 6:6, 7; Eph. 6:4); and

Whereas, state controlled education has become increasingly humanistic and otherwise contrary to a Scriptural philosophy of life; and

Whereas, the Christian school movement seeks to restore the cooperation between the church and the home in education as was the pattern at the time of the founding of our country; be it therefore

Resolved, That the Independent Fundamental Churches of America, meeting at its 49th annual convention in Estes Park, Colorado, June 24-30, 1978, urge its constituency to support, by whatever means and abilities God has given them, the Christian school movement in its effort to establish a biblical base of education; and be it finally

Resolved, That we strongly protest the encroachment upon this movement by government agencies which seek to hinder and unnecessarily control its ministry. 2. Separation of church and state:

Matt. 22:21 says, "Render, therefore, unto Caesar the things which are Caesar's; and unto God, the things that are God's." The IRS is guilty of overstepping its boundaries in attempting to control the things that are of God. Government is permitted to collect taxes to cover the expenses of providing services for its citizens. The IRS has failed to prove how they are going to improve government services by taxing private Christian schools.

3. Clash between public schools and private, christian schools:

The IRS has gotten into the educational battle between public government schools and private, Christian schools. There are basic differences between these two groups.

a. Basic philosophy of education: Public-humanistic, evolutionary, man-centered, permissiveness Christian-Biblical, God-centered.

b. Basic purpose: Public-impart information, without religious slant Christian—(1) Seek to lead the student to a salvation relationship with Jesus Christ, (John 1:12, Rom. 10:9-10, 13); (2) Endeavor to develop the student into a disciple of Jesus Christ, (Rom. 8:29-to be conformed to the image of His Son Jesus Christ); (3) Train the student in academic disciplines, such as math, science, history, languages, etc., as viewed from a Biblical perspective.

4. Costs and financial considerations:

a. Private Christian School students save the government as much as $1,000 per student per year in appropriations to the local school budget (Example: Prince Georges County, Md.)

b. If the IRS ruling unfairly disqualified a school, tuition would be raised, as much as 30 percent.

c. The private Christian schools are providing a valuable service to the nation. They are training young people with quality education, while at the same time saving the government millions of dollars annually.

5. Conflict between IRS nondiscriminatory policy guidelines (sec.4 guidelines, 4.03-operation in good faith on a racially nondiscriminatory basis) and guidelines of private, christian schools.

1. Scholarship or financial assistance: Most private schools do not have scholarships because of school financial policies. To be consistent with sec. 3.01, scholarships, if made available, should be granted to "any race." This means that the scholarships should be awarded on the basis of scholastic ability and not based on

race.

2. Recruitment programs: Most Christian schools do not actively recruit any race. Most Christian schools build their reputation through superior education and therefore do not need a vigorous recruitment program.

3. Increasing percent of minority: This infers a decrease in majority students, calling attention to racism and becomes reverse racial discrimination.

4. Employment of minority teachers, staff: Most private Christian schools have high standards of education, strict fundamental doctrinal beliefs and high standards of morality for their staff, regardless of race. Hiring is based on these criteria and not on race.

5. Combination of lesser activities: Most private Christian schools are already busy with a multitude of extra-curricular, after school activities, such as sports leagues, fine-arts contests, etc.

6. Contradictions and inconsistencies in the IRS proposal:

a. Proposing a set of regulations for two entirely different classes of private schools (IRS Supplementary information).

(1) Those which have been held by a court or agency to be racially discriminatory; (2) Those which have an insignificant number of minorities and started to expand at about the time of desegregation of public schools.

These two catagories are not the same. Class 1 has been proven guilty. Class 2 has not been PROVEN guilty but the IRS has INFERRED guilt unless their suggested guidelines are adopted.

b. Racial nondiscrimination vs. racial balance: Sec. 3.01 demands that a school be open to ALL RACES without discrimination while Sec. 3.03 requires a certain racial balance. There is a difference between racial balance and nondiscrimination.

Sec. 3.01 defines racial nondiscrimination as ANY race while Sec. 4.03 demands evidence for nondiscrimination by certain criteria directed at minority students. Therefore, the nondiscrimination of 3.01 applies to ANY race but the nondiscrimination of 4.03 means minority students.

For these reasons I sincerely request that the IRS should NOT adopt the "Proposed Revenue Procedure on Private Tax-Exempt Schools." Thank you.

Sincerely yours,

Rev. L. SAMUEL MARTZ.

GRACE MEMORIAL CHURCH, Colmar Manor, Md., April 17, 1979.

Mr. JEROME KURTZ,

Commissioner, Internal Revenue Service,
Washington, D.C.

DEAR COMMISSIONER KURTZ: I am writing to voice my strong opposition to the revised revenue procedure concerning taxation of private schools as detailed in news release IR-2091.

I find it incredible and appalling that you have permitted the revised guidelines to be virtually the same as the original ones published last Aug. 22, 1978 in the Federal Register. The news release said that after considering public comments, you have issued these guidelines. I personally listened to the testimony of 116 people, with 100 speaking in opposition to the guidelines. It is hard to believe that you "considered public comment".

Because I was a newspaper reporter before becoming a minister and because I have strong feelings about this issue, I took notes on all of the 116 witnesses who spoke. Your revised guidelines are not supported by the vast majority of those who testified in December, especially the classification of "reviewable" schools. Many witnesses said that the IRS violated the principle of 'innocent until proven guilty.' A number of speakers at the December hearings questioned whether you and your panel were really listening or whether you were simply going through the motions. Your revised guidelines indicate that my worst fears are being realized, that you are determined to get the guidelines enacted and did not really listen to the speakers at last December's hearings. I heard what they said and I have studied the revised guidelines and you simply and plainly have not incorporated the strong opinions expressed at the hearings.

You heard the Senators and Representatives from Congress and what they said. It seems that you are defying congress with your revised guidelines. It is my strong recommendation, which I will make before the U.S. Senate Subcommittee on Taxation and Debt Management on April 27, that the IRS be forbidden to implement these guidelines. I believe the IRS is insensitive to the vast majority of private schools and really did not listen to the testimony at its December, 1978 hearings. The area of "reviewable" schools should be dropped in its entirety. The business of the IRS is to collect taxes, not review schools. You are moving into constitutional areas, such as separation of church and state, innocent until proven guilty, legality of quotas.

Using the revised guidelines, the only time that IRS should enter a case is after "final agency action" has been taken, meaning no further administrative or judicial appeal can be taken. (revised guidelines 3.02). It is my belief that the IRS would be

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