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1
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SYLLABUS
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EXTRACTED KEY WORDS
COURT IRS SCHOOLS TAX-EXEMPT PETITIONER JONES UNIVERSITY EDUCATION POLICY TAXES UNITED STATES GOLDSBORO RELIGION CHARITY PRIVATE SCHOOLS WILLIAM BRIEFS CHRISTIAN PURPOSES TAX EXEMPTION ADMISSIONS DISTRICT COURT INTERPRETATION CONGRESS NATIONAL ASSOCIATION PRO AFFIRMANCE JOHN RICHARD AMICI CURIAE |
U
U.S. Supreme Court
BOB JONES UNIVERSITY v. UNITED STATES, 461 U.S. 574 (1983)
461 U.S. 574
BOB JONES UNIVERSITY v. UNITED STATES
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH
CIRCUIT
No. 81-3.
Argued October 12, 1982
Decided May 24, 1983 *
[ Footnote * ] Together with No. 81-1, Goldsboro Christian Schools, Inc. v. United States, also on
certiorari to the same court.
Section 501(c)(3) of the Internal Revenue Code of 1954 (IRC) provides that "[c]orporations . . .
organized and operated exclusively for religious, charitable . . . or educational purposes" are
tax exemption. Until 1970, the Internal Revenue Service (IRS) granted tax-exempt status under
to private schools, independent of racial admissions policies, and granted charitable deductions for
contributions to such schools under 170 of the IRC. But in 1970, the IRS concluded that it could no
longer justify allowing tax-exempt status under 501(c)(3) to private schools that practiced racial
discrimination, and in 1971 issued Revenue Ruling 71-447 providing that a private school not having
racially nondiscriminatory policy as to students is not "charitable" within the common-law concepts
reflected in 170 and 501(c)(3). In No. 81-3, petitioner Bob Jones University, while permitting
Negroes to enroll as students, denies admission to applicants engaged in an interracial marriage or
to advocate interracial marriage or dating. Because of this admissions policy, the IRS revoked the
University's tax-exempt status. After paying a portion of the federal unemployment taxes for a
taxable year, the University filed a refund action in Federal District Court, and the Government
counterclaimed for unpaid taxes for that and other taxable years. Holding that the IRS exceeded its
powers in revoking the University's tax-exempt status and violated the University's rights under the
Religion Clauses of the First Amendment, the District Court ordered the IRS to refund the taxes
rejected the counterclaim. The Court of Appeals reversed. In No. 81-1, petitioner Goldsboro
Schools maintains a racially discriminatory admissions policy based upon its interpretation of the
accepting for the most part only Caucasian students. The IRS determined that Goldsboro was not an
organization described in 501(c)(3) and hence was required to pay federal social security and
unemployment taxes. After paying a portion of such taxes for certain years, Goldsboro filed a
in Federal District Court, and the IRS counterclaimed for unpaid taxes. The District Court entered
summary judgment for [461 U.S. 574, 575] the IRS, rejecting Goldsboro's claim to tax-exempt status
under 501(c) (3) and also its claim that the denial of such status violated the Religion Clauses of
Amendment. The Court of Appeals affirmed.
Held:
file:///C|/Documents and Settings/user/Desktop/LegalCaseDocs/Bob Jones University v.
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2
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OPINION
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EXTRACTED KEY WORDS
SCHOOLS IRS RACIALLY DISCRIMINATORY JONES UNIVERSITY INTERNAL REVENUE TAX-EXEMPT PRIVATE SCHOOLS UNITED STATES INTERNAL REVENUE CODE PETITIONERS TAX EXEMPTIONS BOB JONES UNIVERSITY POLICY POLICIES DISTRICT COURT RACIALLY DISCRIMINATORY ADMISSIONS INTERNAL REVENUE SERVICE DEDUCTIONS CONTRIBUTIONS REVENUE RULING GOVERNMENT CHARITABLE TRUST THREE-JUDGE DISTRICT COURT PROHIBITING SETTINGS/USER/DESKTOP/LEGALCASEDOCS/BOB JONES UNIVERSITY GRANTED CERTIORARI COMMISSIONER GOLDSBORO CHRISTIAN SCHOOLS INTERPRETATION |
U
U.S. Supreme Court
BOB JONES UNIVERSITY v. UNITED STATES, 461 U.S. 574 (1983)
461 U.S. 574
BOB JONES UNIVERSITY v. UNITED STATES
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH
CIRCUIT
No. 81-3.
Argued October 12, 1982
Decided May 24, 1983
CHIEF JUSTICE BURGER delivered the opinion of the Court.
We granted certiorari to decide whether petitioners, nonprofit private schools that prescribe and
racially discriminatory admissions standards on the basis of religious doctrine, qualify as
organizations under 501(c) (3) of the Internal Revenue Code of 1954.
I
A
Until 1970, the Internal Revenue Service granted tax-exempt status to private schools, without
their racial admissions policies, under 501(c)(3) of the Internal Revenue Code, 26 U.S.C.
and granted charitable [461 U.S. 574, 578] deductions for contributions to such schools under 170
the Code, 26 U.S.C. 170. 2
On January 12, 1970, a three-judge District Court for the District of Columbia issued a preliminary
injunction prohibiting the IRS from according tax-exempt status to private schools in Mississippi
discriminated as to admissions on the basis of race. Green v. Kennedy, 309 F. Supp. 1127, appeal
sub nom. Cannon v. Green, 398 U.S. 956 (1970). Thereafter, in July 1970, the IRS concluded that it
could "no longer legally justify allowing tax-exempt status [under 501(c)(3)] to private schools
practice racial discrimination." IRS News Release, July 7, 1970, reprinted in App. in No. 81-3, p.
At the same time, the IRS announced that it could not "treat gifts to such schools as charitable
for income tax purposes [under 170]." Ibid. By letter dated November 30, 1970, the IRS formally
notified private schools, including those involved in this litigation, of this change in policy,
to all private schools in the United States at all levels of education." See id., at A232.
On June 30, 1971, the three-judge District Court issued its opinion on the merits of the Mississippi
challenge. Green v. Connally, 330 F. Supp. 1150, summarily aff'd sub nom. Coit v. Green, 404 U.S.
(1971). That court approved the IRS's amended construction of the Tax Code. The court also held that
file:///C|/Documents and Settings/user/Desktop/LegalCaseDocs/Bob Jones University v.
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racially discriminatory private schools were not entitled to exemption under 501(c)(3) and that
were not entitled to deductions for contributions to such schools under 170. The court permanently
enjoined the Commissioner of [461 U.S. 574, 579] Internal Revenue from approving tax-exempt status
for any school in Mississippi that did not publicly maintain a policy of nondiscrimination.
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3
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DISSENTING
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EXTRACTED KEY WORDS
COURT ACT POLICY RACIAL DISCRIMINATION UNITED STATES STATUTE JONES UNIVERSITY TAX-EXEMPT IRS NATIONAL POLICY PURPOSES REVENUE ACT TAX DENY STAT EXEMPTION CHARITABLE CONTRIBUTION LEGISLATION EDUCATIONAL INSTITUTIONS STATUTORY CONSTRUCTION QUESTION AUTHORITY PETITIONERS INTERPRETATION INTERNAL REVENUE CODE SETTINGS/USER/DESKTOP/LEGALCASEDOCS/BOB JONES UNIVERSITY AMENDMENT LEGISLATE LEGISLATIVE HISTORY INCOME TAX |
U
U.S. Supreme Court
BOB JONES UNIVERSITY v. UNITED STATES, 461 U.S. 574 (1983)
461 U.S. 574
BOB JONES UNIVERSITY v. UNITED STATES
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH
CIRCUIT
No. 81-3.
Argued October 12, 1982
Decided May 24, 1983
JUSTICE REHNQUIST, dissenting.
The Court points out that there is a strong national policy in this country against racial
the extent that the Court states that Congress in furtherance of this policy could deny tax-exempt
educational institutions that promote racial discrimination, I readily agree. But, unlike the
convinced that Congress simply has failed to take this action and, as this Court has said over and
again, regardless of our view on the propriety of Congress' failure to legislate we are not
empowered to act for it.
In approaching this statutory construction question the Court quite adeptly avoids the statute it is
construing. This I am sure is no accident, for there is nothing in the language [461 U.S. 574, 613]
501(c)(3) that supports the result obtained by the Court. Section 501(c)(3) provides tax-exempt
"Corporations, and any community chest, fund, or foundation, organized and operated exclusively for
religious, charitable, scientific, testing for public safety, literary, or educational purposes, or
national or international amateur sports competition (but only if no part of its activities involve
provision of athletic facilities or equipment), or for the prevention of cruelty to children or
part of the net earnings of which inures to the benefit of any private shareholder or individual, no
substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to
legislation (except as otherwise provided in subsection (h)), and which does not participate in, or
intervene in (including the publishing or distributing of statements), any political campaign on
any candidate for public office." 26 U.S.C. 501(c)(3).
With undeniable clarity, Congress has explicitly defined the requirements for 501(c)(3) status. An
must be (1) a corporation, or community chest, fund, or foundation, (2) organized for one of the
enumerated purposes, (3) operated on a nonprofit basis, and (4) free from involvement in lobbying
activities and political campaigns. Nowhere is there to be found some additional, undefined public
requirement.
The Court first seeks refuge from the obvious reading of 501(c)(3) by turning to 170 of the Internal
Revenue Code, which provides a tax deduction for contributions made to 501(c)(3) organizations. In
setting forth the general rule, 170 states:
file:///C|/Documents and Settings/user/Desktop/LegalCaseDocs/Bob Jones University v.
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"There shall be allowed as a deduction any charitable contribution (as defined in subsection (c))
of which is made within the taxable year. A charitable contribution shall be allowable as a
if verified [461 U.S. 574, 614] under regulations prescribed by the Secretary." 26 U.S.C.
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