Bob Jones University v. United States
Decided on May 24, 1983; 461 US 574


A. Issues Discussed: Free Exercise Clause, Establishment Clause, Civil Rights

B. Legal Question Presented:

Do nonprofit private schools that prescribe and enforce racially discriminatory admissions standards on the basis of religious doctrine, qualify as tax-exempt organizations under 501(c) (3) of the Internal Revenue Code of 1954?


A. Background:

"Until 1970, the Internal Revenue Service granted tax-exempt status to private schools, without regard to their racial admissions policies, under 501(c)(3) of the Internal Revenue Code, and granted charitable deductions for contributions to such schools...

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 that discriminated as to admissions on the basis of race. 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 which practice racial discrimination.' At the same time, the IRS announced that it could not 'treat gifts to such schools as charitable deductions for income tax purposes.' By letter dated November 30, 1970, the IRS formally notified private schools, including those involved in this litigation, of this change in policy, 'applicable to all private schools in the United States at all levels of education.'

On June 30, 1971, the three-judge District Court issued its opinion on the merits of the Mississippi challenge. That court approved the IRS's amended construction of the Tax Code...

Bob Jones University is a nonprofit corporation located in Greenville, S. C. Its purpose is 'to conduct an institution of learning..., giving special emphasis to the Christian religion and the ethics revealed in the Holy Scriptures.' The corporation operates a school with an enrollment of approximately 5,000 students, from kindergarten through college and graduate school. Bob Jones University is not affiliated with any religious denomination, but is dedicated to the teaching and propagation of its fundamentalist Christian religious beliefs. It is both a religious and educational institution. Its teachers are required to be devout Christians, and all courses at the University are taught according to the Bible. Entering students are screened as to their religious beliefs, and their public and private conduct is strictly regulated by standards promulgated by University authorities.

The sponsors of the University genuinely believe that the Bible forbids interracial dating and marriage. To effectuate these views, Negroes were completely excluded until 1971. From 1971 to May 1975, the University accepted no applications from unmarried Negroes, but did accept applications from Negroes married within their race.

Following the decision of the United States Court of Appeals for the Fourth Circuit in McCrary v. Runyon, prohibiting racial exclusion from private schools, the University revised its policy. Since May 29, 1975, the University has permitted unmarried Negroes to enroll; but a disciplinary rule prohibits interracial dating and marriage...

Thereafter, on April 16, 1975, the IRS notified the University of the proposed revocation of its tax-exempt status. On January 19, 1976, the IRS officially revoked the University's tax-exempt status, effective as of December 1, 1970, the day after the University was formally notified of the change in IRS policy. The University subsequently filed returns under the Federal Unemployment Tax Act for the period from December 1, 1970, to December 31, 1975, and paid a tax totalling $21 on one employee for the calendar year of 1975. After its request for a refund was denied, the University instituted the present action, seeking to recover the $21 it had paid to the IRS. The Government counterclaimed for unpaid federal unemployment taxes for the taxable years 1971 through 1975, in the amount of $489,675.59, plus interest.

The United States District Court for the District of South Carolina held that revocation of the University's tax-exempt status exceeded the delegated powers of the IRS, was improper under the IRS rulings and procedures, and violated the University's rights under the Religion Clauses of the First Amendment...

The Court of Appeals for the Fourth Circuit, in a divided opinion, reversed... In the court's view, Bob Jones University did not meet this requirement, since its 'racial policies violated the clearly defined public policy, rooted in our Constitution, condemning racial discrimination and, more specifically, the government policy against subsidizing racial discrimination in education, public or private.' ...Finally, the Court of Appeals rejected petitioner's arguments that the revocation of the tax exemption violated the Free Exercise and Establishment Clauses of the First Amendment."

On certiorari the US Supreme Court affirmed the judgment of the 4th Circuit Court of Appeals.

B. Counsel of Record:
Opposing Side
Unavailable Unavailable
C. The Arguments:
Opposing Side
Unavailable Unavailable
Opposing Side
Briefs of amici curiae urging affirmance in both cases were filed by Nadine Strossen, E. Richard Larson, and Samuel Rabinove for the American Civil Liberties Union et al.; by Harold P. Weinberger, Lawrence S. Robbins, Justin J. Finger, Jeffrey P. Sinensky, and David M. Raim for the Anti-Defamation League of B'nai B'rith; by John H. Pickering, William T. Lake, and Adam Yarmolinsky for Independent Sector; by Amy Young-Anawaty, David Carliner, Burt Neuborne, and Harry A. Inman for the International Human Rights Law Group; by Robert H. Kapp, Walter A. Smith, Jr., Joseph M. Hassett, David S. Tatel, Richard C. Dinkelspiel, William L. Robinson, Norman J. Chachkin, and Frank R. Parker for the Lawyers' Committee for Civil Rights Under Law; by Thomas I. Atkins, J. Harold Flannery, and Robert D. Goldstein for the National Association for the Advancement of Colored People et al.; by Leon Silverman, Linda R. Blumkin, Ann F. Thomas, Marla G. Simpson, and Jack Greenberg for the NAACP Legal Defense and Educational Fund, Inc.; by Harry K. Mansfield for the National Association of Independent Schools; by Charles E. Daye for the North Carolina Association of Black Lawyers; by Earle K. Moore for the United Church of Christ; and by Lawrence E. Lewy, pro se.

Assistant Attorney General Reynolds argued the cause for the United States. With him on the briefs were Acting Solicitor General Wallace and Deputy Assistant Attorney General Cooper.
Briefs of amici curiae urging reversal were filed by Earl W. Trent, Jr., and John W. Baker for the American Baptist Churches in the U.S. A. et al.; by William H. Ellis for the Center for Law and Religious Freedom of the Christian Legal Society; by Forest D. Montgomery for the National Association of Evangelicals; and by Congressman Trent Lott, pro se.

William Bentley Ball argued the cause for petitioner. With him on the briefs were Philip J. Murren and Richard E. Connell.


"In Revenue Ruling 71-447, the IRS formalized the policy, first announced in 1970, that 170 and 501(c)(3) embrace the common-law 'charity' concept. Under that view, to qualify for a tax exemption pursuant to 501(c)(3), an institution must show, first, that it falls within one of the eight categories expressly set forth in that section, and second, that its activity is not contrary to settled public policy....

When the Government grants exemptions or allows deductions all taxpayers are affected; the very fact of the exemption or deduction for the donor means that other taxpayers can be said to be indirect and vicarious 'donors.' Charitable exemptions are justified on the basis that the exempt entity confers a public benefit - a benefit which the society or the community may not itself choose or be able to provide, or which supplements and advances the work of public institutions already supported by tax revenues.... The institution's purpose must not be so at odds with the common community conscience as to undermine any public benefit that might otherwise be conferred.

We are bound to approach these questions with full awareness that determinations of public benefit and public policy are sensitive matters with serious implications for the institutions affected; a declaration that a given institution is not 'charitable' should be made only where there can be no doubt that the activity involved is contrary to a fundamental public policy. But there can no longer be any doubt that racial discrimination in education violates deeply and widely accepted views of elementary justice....

Petitioners contend that, regardless of whether the IRS properly concluded that racially discriminatory private schools violate public policy, only Congress can alter the scope of 170 and 501(c)(3). Petitioners accordingly argue that the IRS overstepped its lawful bounds in issuing its 1970 and 1971 rulings.

On the record before us, there can be no doubt as to the national policy. In 1970, when the IRS first issued the ruling challenged here, the position of all three branches of the Federal Government was unmistakably clear.... We therefore hold that the IRS did not exceed its authority when it announced its interpretation of 170 and 501(c)(3) in 1970 and 1971.

...Petitioners contend that, even if the Commissioner's policy is valid as to nonreligious private schools, that policy cannot constitutionally be applied to schools that engage in racial discrimination on the basis of sincerely held religious beliefs. As to such schools, it is argued that the IRS construction of 170 and 501(c)(3) violates their free exercise rights under the Religion Clauses of the First Amendment.

The governmental interest at stake here is compelling. ...[T]he Government has a fundamental, overriding interest in eradicating racial discrimination in education - 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.

The remaining issue is whether the IRS properly applied its policy to these petitioners.... Petitioner Bob Jones University... 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. 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. We therefore find that the IRS properly applied Revenue Ruling 71-447 to Bob Jones University."

The US Supreme Court affirmed the judgment of the 4th Circuit Court of Appeals.

Justice Vote: 8 Pro vs. 1 Con

  • Burger, W. Pro (Wrote majority opinion)
  • Brennan, W Pro (Joined majority opinion)
  • White, B. Pro (Joined majority opinion)
  • Marshall, T. Pro (Joined majority opinion)
  • Stevens, J.P. Pro (Joined majority opinion)
  • O'Connor, S.D. Pro (Joined majority opinion)
  • Powell, L. Pro (Wrote concurring opinion)
  • Blackmun, H. Pro (Joined majority opinion)
  • Rehnquist, W. Con (Wrote dissenting opinion)

The ACLU, as amicus curiae, urged affirmance of the 4th Circuit Court of Appeals judgment; the Supreme Court affirmed in an 8-1 vote, giving the ACLU an apparent win.