Bob Jones University regains nonprofit status 17 years after it dropped discriminatory policy

Bob Jones University regains nonprofit status 17 years after it dropped discriminatory policy

BJU entrance (Photo: File)

In a move that is been significantly more than couple of years when you look at the generating, Bob Jones University announced Wednesday it can regain its federal tax-exempt status on March 1, a lot more than three years following the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.

The problem within the court instance had been the refusal that is university’s enable interracial relationship or wedding among pupils, staff or faculty regarding the college, a guideline it offers since abandoned.

The conservative Christian college dropped its interracial ban that is dating a nationwide televised interview with previous president Bob Jones III on CNN’s Larry King are now living in 2000. In 2008, past President Stephen Jones, great-grandson of university and evangelist creator Bob Jones, apologized for BJU’s past racial discrimination.

However the college hadn’t tried to reinstate its tax-exempt status until 2014 after Steve Pettit took over once the school’s fifth president in its 90-year history.

“Organizing as being a tax-exempt entity is one thing BJU has needed seriously to do for a long time,” Pettit said.

In his meeting that is first with university’s Cabinet, Pettit said he thought it absolutely was right for BJU to look for its tax-exempt status considering that the college does not think the jobs it once held about battle.

Pettit called the university’s racist policies a social problem that had not been biblical.

“The Bible is extremely clear,” Pettit stated as he announced the alteration towards the university Wednesday evening. “We are constructed of one bloodstream.”

Bob Jones University destroyed its income tax exemption following a 13-year fight with the IRS over perhaps the university’s policies against interracial relationship precluded it as being a non-taxable spiritual academic organization. The college didn’t admit any black students until 1971, 17 years after Brown vs. Board of Education. After that it wouldn’t acknowledge any pupils who had been in a marriage that is mixed-race produced rules to prohibit pupils from interracial relationship.

The actual situation rose to your Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status since the government’s desire for eradicating racial discrimination from training overrode the university’s First Amendment liberties to spiritual speech that is free.

The way it is happens to be cited several times through the years. Of late, it arose in a trade prior to the Supreme Court within the Obergefell vs. Hodges choice, which legalized homosexual wedding. The IRS commissioner said the agency would not target the tax-exempt status of religious institutions that oppose gay marriage after that decision.

It’s taken two-and-a-half years for BJU to perform the reorganization since it utilized a complicated want to separate its company into two entities using the college dropping beneath the umbrella of the primary school’s current non-profit status to quickly attain its very own, in accordance with college statements and organization documents filed using the sc Secretary of State additionally the IRS.

That current nonprofit ended up being called Bob Jones Elementary School, Inc. until final might, with regards to had been renamed BJU, Inc.

The restructuring came after “consultation with lawyer and accountants with numerous several years of expertise in assisting taxation exempt organizations—as well as input from people in the community that is BJU our congressional delegation,” Pettit stated.

The alteration didn’t need IRS approval because its elementary college had been a nonprofit, although the university had formal communication and conversations using the IRS, said Randy web Page, BJU spokesman.

The college happens to be detailed as being a 501()( that is c) nonprofit in the IRS site, stated Michael Dobzinski, IRS spokesman.

What it indicates

Up to now, if users of the city or alumni wished to donate to the college, their gift suggestions had been just income tax deductible should they offered to particular nonprofit hands of this college, such as for example its scholarship investment, art museum or foundation that is athletic.

Donors couldn’t offer gifts that are tax-deductible the college it self to greatly help with money promotions or even for university initiatives.

The majority of the big presents towards the college recently, such as a $500,000 present through the Sargant Foundation in December and a $1 million gift that is anonymous final November, went toward its BJU Scholarship Fund, a nonprofit entity of this college.

Now donors’ gift suggestions will undoubtedly be tax-deductible, web Page stated.

“It helps whenever you’re trying to raise cash for a business to possess a status that is tax-exempt” web Page stated. “That clearly helps your development people, your development people and people in the neighborhood – organizations, people, alumni – making it simpler to subscribe to a nonprofit.”

The alteration wouldn’t affect pupils’ financial aid and wouldn’t influence workers, he stated.

The change amounts the playing field involving the college as well as other sis institutions when obtaining grants, he stated.

It moves BJU from a college that is for-profit a nonprofit category with all the U.S. Department of Education, “which is generally identified more positively by the public,” web web Page stated.

That modification could show crucial because the U.S. Department of Education has targeted colleges that are for-profit additional oversight in the past few years and fined a few for-profit companies of universities beneath the federal government, which led to universities like Corinthian university and ITT Technical Institute shutting down.

And even though the college runs debt-free and does not intend to accept financial obligation, it may possibly conserve through reduced rates of interest if it thought we would accept financial obligation, web Page stated.

just just How BJU are going to be organized

On March 1, Bob Jones University, Inc. would be renamed Bob Jones Education Group, Inc. and can remain the university’s entity that is taxable will donate approximately half its assets to your non-taxable BJU, Inc.

The university’s assets will effortlessly be split involving the two companies.

BJU, Inc. should include the university & most of their facilities, the art museum, primary college and kid development center. BJU Press authors will also come beneath the umbrella of BJU, Inc.

The arm that is for-profit of college – Bob Jones Education Group, Inc. – should include the BJU Press, University Cleaners while the Bob Jones Academy center and high schools.

The college will be governed by still its 25-member Board of Trustees. The board will appoint a brand new eight-member board to govern Bob Jones Education Group.

The change procedure started in belated 2014 by having research of just how to attain income tax exemption. Final might 5, the Board of Trustees authorized the last policy for pursuing income tax exemption and also the management happens to be attempting to implement it since that time.

The university has been seeking regional accreditation through the Southern Association of Colleges and Schools Commission on Colleges at the same time. The college, that is detailed as a candidate for certification, notified the payment of the changes that are potential which wouldn’t affect its candidacy, web web web Page stated.

The college delivered SACSCOC having its proposition arrange for income tax exemption and there’s no noticeable improvement in governance, stated Pamela Cravey, SACSCOC spokeswoman.

“The action ended up being an IRS matter and failed to represent a substantive modification,” Cravey stated,

SACSCOC has considered the college being a not-for-profit, she stated.

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