Bob Jones University v. United States

461 U.S. 574 (1983)

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Nature of the Case

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Facts

Bob Jones (P) is a nonprofit institution that operates a school with an enrollment of 5,000 students from kindergarten through college and graduate school. It is both a religious and an educational institution. Students are screened for religious beliefs, and their public and private conduct is strictly regulated by University authorities. The sponsors have a genuine belief that the Bible forbids interracial dating and marriage. To that effect, Negroes were completely excluded until 1971, and from 1971-75, no applications from unmarried Negroes were accepted, and P did accept applications from Negroes married within their race. Since 1975, P has permitted unmarried Negroes to enroll, but disciplinary rules prohibit interracial dating and marriage. Until 1970, P got tax-exempt status under 501(c)(3). The IRS then notified P of its intent to challenge tax-exempt status for private schools practicing racial discrimination in their admissions. The District Court held that the revocation of P’s tax-exempt status exceeded delegated powers of the IRS and violated P’s religious rights under the Religion Clauses of the First Amendment. The 4^th Circuit reversed citing Green and concluded that 501(c)(3) must be read against the background of charitable trust law and that an institution must not be contrary to public policy to be charitable. Since P’s policies violated clearly defined public policies, the IRS was correct in revoking the tax-exempt status. The court rejected P’s argument that the revocation violated its Free Exercise and First Amendment rights. In the Goldsboro case, the district court went with the revocation, and the 4^th Circuit affirmed based on P’s case.