Form 990 – the IRS tax form used by recognized 501(c) non-profit organizations
For over a week now we have been hearing about the “scandal” within the IRS’s Tax-Exempt division. Congress has been holding hearings, calling on current and past Commissioners to testify about the additional scrutiny given to Tea Party organizations. A couple of days ago, I asked if this additional scrutiny was a scandal or not.
In addition to my comments that day, the Guardian has now brought up another issue that may be adding fuel to the conservative f(ire). That fuel is a four-decade simmering anger at the IRS by the conservative religious right. An anger fueled by both segregation and religion.
In 1954, the US Supreme Court declared in Brown v. Board of Education that segregation in education was unconstitutional. In 1964, Congress passed the Civil Rights Act that, which among other issues makes discrimination based on race in public accommodations and employment illegal. In 1967, the US Supreme Court declared in Loving v. Virginia that bans on interracial marriage were unconstitutional. In 1970, the IRS changed their tax-exempt regulation on private schools to reflect these policies.
Bob Jones University had, under pre-1970 regulations been granted tax-exempt status. In 1970, as a result of the change in regulations, the IRS notified Bob Jones University that they intended to revoke the university’s tax-exempt status because of their segregationist policy of initially not admitting blacks and then, later of not admitting or expelling students who entered into, engaged in, or advocated for interracial marriage or dating.
Bob Jones University felt that they had a “biblical” right to discriminate. So they filed case after case to overturn the IRS revocation. Finally in 1983, in Bob Jones University v. United States, the US Supreme upheld the IRS revocation of Bob Jones University’s tax-exempt status because of its segregationist policies.
The Justices disagreed with Bob Jones’ biblical interpretation of the competing First and Fourteenth amendments to the US Constitution. In looking at both amendments, they first declared that there is strong governmental interest in ending discrimination:
[The] Government has a fundamental, overriding interest in eradicating racial discrimination in education 29 – discrimination that prevailed, with official approval, for the first 165 years of this Nation’s constitutional history. That governmental interest substantially outweighs whatever burden denial of tax benefits places on petitioners’ exercise of their religious beliefs.
Then, citing the aforementioned cases (and others), the Court held stated:
An unbroken line of cases following Brown v. Board of Education establishes beyond doubt this Court’s view that racial discrimination in education violates a most fundamental national public policy, as well as rights of individuals.
The Court then pointed out that this IRS regulation was still constitutional even after Bob Jones University opened its doors to people of all races. The Justices reiterated the lower court decision, stating that the University remained racially discriminatory in its policies at the university in violation of the tax-exempt regulations:
Petitioner Bob Jones University, however, contends that it is not racially discriminatory. It emphasizes that it now allows all races to enroll, subject only to its restrictions on the conduct of all students, including its prohibitions of association between men and women of different races, and of interracial marriage. 31 Although a ban on intermarriage or interracial dating applies to all races, decisions of this Court firmly establish that discrimination on the basis of racial affiliation and association is a form of racial discrimination, see, e. g., Loving v. Virginia, 388 U.S. 1 (1967); McLaughlin v. Florida, 379 U.S. 184 (1964); Tillman v. Wheaton-Haven Recreation Assn., 410 U.S. 431 (1973). We therefore find that the IRS properly applied Revenue Ruling 71-447 to Bob Jones University. 32
The judgments of the Court of Appeals are, accordingly,
I think that this article in the Guardian is correct. It might just be another reason for the current tax-exempt status furor. It seems that pulling the tax-exempt status of a religiously-based institution for its violation of our country’s stance for equality under the 14th Amendment of the US Constitution resulted in a simmering pot of anger just waiting for a bit more fire to bring conservatives to a full boil.
What do you think? Please comment. I’d be interested in hearing your opinion.