Tax exemption case divides church experts

Specialists in religious liberty issues are concerned that the public debate over tax exemption for Bob Jones University (BJU) and other private schools that practice racial discrimination may have neglected a crucial point.

Public understanding has been clouded, some of them argue, because the media has focused on the racial aspects of the dispute. The press has overlooked the case's implications for First Amendment guarantees of free exercise of religion.

These implications were explored here recently in a meeting sponsored by the Project on Church, State, and Taxation, funded by the Lilly Endowment and administered by the National Conference of Christians and Jews.

All participants agreed with Dean Kelley of the National Council of Churches that racial discrimination is ''pernicious.'' But they disagreed on whether the government was justified in withdrawing a school's tax exempt status on the grounds that it is violating public policy - a justification dating back to a 1971 case involving private schools in Mississippi.

Stanley Weithorn, a tax attorney working primarily with nonprofit groups, presented the case against tax exemption for private schools that discriminate. He said he favored exemption until the recent debate flared. Since then, he says , he has concluded that racial discrimination is ''so dehumanizing'' it should not be allowed any more than polygamy. But he opposes making racial discrimination by religious schools a criminal offense.

Charles Whelan, a Jesuit professor of law at Fordham University, said he considered racial discrimination ''immoral,'' but thought some religious groups sincerely believed it was right. For the government to act against them by ending their tax exempt status, he said, threatens religious liberty.

He opposed President Reagan's call for legislation to outlaw exemption in such cases, and said it should be ruled unconstitutional if passed. But he endorsed the President's contention that if exemptions are to be denied, Congress and not the Internal Revenue Service should set the guidelines.

Another disputed point was whether exemption amounted to a subsidy, as Mr. Weithorn held. Fr. Whelan, who opposed government grants to schools practicing discrimination, said tax exemption and grants differed significantly because ''you cannot buy anything with an exemption.''

Richard Neuhaus, a Lutheran minister prominent in the anti-Vietnam war movement, noted that many religious groups have opposed national policy on a wide range of foreign and domestic issues. He suggested that the government might act against them by applying the same ''violating public policy'' logic used against BJU.

Mr. Kelley said in an interview that the National Council of Churches came to an impasse on the BJU case.