In a move that’s been more than two years in the making, Bob Jones University announced Wednesday it would regain its federal tax-exempt status on March 1, more than three decades after the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.
The issue in the court case was the university’s refusal to allow interracial dating or marriage among students, staff or faculty of the university, a rule it has since abandoned.
The conservative Christian university dropped its interracial dating ban in a nationally televised interview with past president Bob Jones III on CNN’s Larry King Live in 2000. In 2008, past President Stephen Jones, great-grandson of evangelist and university founder Bob Jones, apologized for BJU’s past racial discrimination.
But the university hadn’t sought to reinstate its tax-exempt status until 2014 after Steve Pettit took over as the school’s fifth president in its 90-year history.
“Organizing as a tax-exempt entity is something BJU has needed to do for quite some time,” Pettit said.
In his first meeting with the university’s Cabinet, Pettit said he believed it was appropriate for BJU to seek its tax-exempt status because the university doesn’t believe the positions it once held about race.
Pettit called the university’s racist policies a social issue that was not biblical.
“The Bible is very clear,” Pettit said as he announced the change to the university Wednesday night. “We are made of one blood.”
Bob Jones University lost its tax exemption after a 13-year battle with the IRS over whether the university’s policies against interracial dating precluded it as a non-taxable religious educational institution. The university didn’t admit any black students until 1971, 17 years after Brown vs. Board of Education. It then wouldn’t admit any students who were in a mixed-race marriage and created rules to prohibit students from interracial dating.
The case rose to the Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status because the government’s interest in eradicating racial discrimination from education overrode the university’s First Amendment rights to religious free speech.
The case has been cited many times through the years. Most recently, it arose in an exchange before the Supreme Court in the Obergefell vs. Hodges decision, which legalized gay marriage. After that decision, the IRS commissioner said the agency would not target the tax-exempt status of religious institutions that oppose gay marriage.
It’s taken two-and-a-half years for BJU to accomplish the reorganization because it used a complicated plan to split its organization into two entities with the university falling under the umbrella of its elementary school’s existing non-profit status to achieve its own, according to university statements and organization documents filed with the South Carolina Secretary of State and the IRS.
That existing nonprofit was called Bob Jones Elementary School, Inc. until last May, when it was renamed BJU, Inc.
The restructuring came after “consultation with legal counsel and accountants with many years of experience in assisting tax exempt organizations—as well as input from members of the BJU community and our congressional delegation,” Pettit said.
The change didn’t require IRS approval because its elementary school was already a nonprofit, though the university had formal correspondence and conversations with the IRS, said Randy Page, BJU spokesman.
The university is now listed as a 501(c)(3) nonprofit on the IRS website, said Michael Dobzinski, IRS spokesman.
SOURCE: Nathaniel Cary, [email protected]