「性惡」論是天臺標誌性的教義。在傳統中國佛學形態近代轉化的過程中，民國觀宗寺天臺學界與支派那內學院唯識學界就「性惡」論展開了一場爭論。此一爭論雖有其相對的獨立性與特殊性，而廣義上仍屬於近代《起信論》之爭的一部分。爭論的核心關乎「體用」關係問題，內學院堅持堅持體/智、如相分之立場，否定「真如隨緣」之說，故以為天臺之「性具」說有合於唯識「種子」之義，而「性惡」論則是天臺後學之謬解。對於唯識學界的批評，天臺學界有一澄清與辯護，在回歸宋代天臺山家「性惡」論的前提下，天臺學界對天臺的「性具」義與唯識的「種子」義給予了一調停，以此說明「性具」說對體/用的溝通，從而回應了唯識學界對「性惡」論的質疑。天臺觀宗系統對「性惡」論的辯護同時也是對傳統的一個新詮釋，其義理抉擇配合著對佛教之職能定位，相對於傳統「性惡」論與「懺法」的高度結合，近代天臺將廣義的「性具善惡」論與道德心理發生機制問題聯繫起來，以此將佛教定位為一終極的「道德心理」之學。

As the main doctorine of Tiantai buddhism, theory of inherent evil in the buddha-nature which Guanzong temple sticked to, was challenged by Neixue School in the period of the Republic of China. The key point of the debate which was regarded as the part of the debate of Awakening of Faithin Mahāyāna in morden china, was how to understand the relationship between essence and funtion. According to Neixue School, buddhua-nature is essenc but not funtion, so the theory of inherent evil in the buddha-nature can't be accepted, whereas Guanzong temple persisted in the theory of inherent evil and resolved the problem of confusing essence and function by intergrating the concept of bīja and the thory of inherent inlusion, so as to give morden buddhism a new function.