BJU entrance (Photo: File)
In a move that is been a lot more than 2 yrs when you look at the generating, Bob Jones University announced Wednesday it might regain its federal tax-exempt status on March 1, a lot more than three decades following the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.
The matter into the court situation had been the universityвЂ™s refusal to enable interracial relationship or wedding among students, staff or faculty of this college, a guideline it offers since abandoned.
The conservative Christian college dropped its interracial dating ban in a nationwide televised interview with previous president Bob Jones III on CNNвЂ™s Larry King reside in 2000. In 2008, last President Stephen Jones, great-grandson of university and evangelist creator Bob Jones, apologized for BJUвЂ™s past racial discrimination.
Nevertheless the college hadnвЂ™t wanted to reinstate its tax-exempt status until 2014 after Steve Pettit took over because the schoolвЂ™s fifth president in its 90-year history.
вЂњOrganizing as a tax-exempt entity is one thing BJU has had a need to do for quite a while,вЂќ Pettit stated.
Inside the very first ending up in the universityвЂ™s Cabinet, Pettit said he thought it absolutely was suitable for BJU to get its tax-exempt status since the college does not think the roles it once held about competition.
Pettit called the universityвЂ™s racist policies an issue that is social had not been biblical.
вЂњThe Bible is quite clear,вЂќ Pettit stated while he announced the alteration towards the college Wednesday evening. вЂњWe are constructed with one bloodstream.вЂќ
Bob Jones University destroyed its income tax exemption after a 13-year struggle with the IRS over whether or not the universityвЂ™s policies against interracial relationship precluded it as being a non-taxable spiritual academic organization. The college didnвЂ™t acknowledge any black colored pupils until 1971, 17 years after Brown vs. Board of Education. After that it wouldnвЂ™t acknowledge any pupils have been in a marriage that is mixed-race developed guidelines to prohibit pupils from interracial relationship.
The scenario rose towards the Supreme Court, which ruled in 1983 that the IRS could revoke the universityвЂ™s tax-exempt status as the governmentвЂ™s curiosity about eradicating racial discrimination from training overrode the universityвЂ™s First Amendment liberties to spiritual speech that is free.
The truth was cited times that are many many years. Of late, it arose within an change 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.
ItвЂ™s taken two-and-a-half years for BJU to perform the reorganization as it utilized a plan that is complicated separate its organization into two entities because of the college dropping underneath the umbrella of the primary schoolвЂ™s current non-profit status to quickly attain its, based on college statements and organization documents filed with all the sc Secretary of State in addition to IRS.
That nonprofit that is existing called Bob Jones Elementary class, Inc. until final might, with regards to was renamed BJU, Inc.
The restructuring arrived after вЂњconsultation with a lawyer and accountants with numerous several years of expertise in assisting tax exempt organizationsвЂ”as well as input from people in the community that is BJU our congressional delegation,вЂќ Pettit stated.
The alteration didnвЂ™t need IRS approval because its primary college had been a nonprofit, although the college had correspondence that is formal conversations with all the IRS, stated Randy Page, BJU spokesman.
The college happens to be detailed as being a 501()( that is c) nonprofit in the IRS web site, stated Michael Dobzinski, IRS spokesman.
What it indicates
So far, if people in the city or alumni wished to subscribe to the college, their presents had been just taxation deductible when they provided to particular nonprofit hands associated with college, such as for instance its scholarship investment, art museum or foundation that is athletic.
Donors couldnвЂ™t provide tax-deductible presents to the university it self to support capital promotions or even for college initiatives.
The majority of the big gift ideas 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 donorsвЂ™ presents will likely to be tax-deductible, web web Page stated.
вЂњIt helps whenever youвЂ™re attempting to raise cash for a company to own a tax-exempt status,вЂќ web web Page stated. вЂњThat clearly helps your advancement folks, your development people and people in the neighborhood вЂ“ organizations, people, alumni вЂ“ making it better to contribute to a nonprofit.вЂќ
The alteration wouldnвЂ™t affect pupilsвЂ™ grants or scholarships and wouldnвЂ™t influence workers, he said.
The change amounts the playing field involving the college as well as other cousin organizations when trying to get funds, he stated.
That change could show essential once the U.S. Department of Education has targeted colleges that are for-profit added oversight in modern times and fined a few for-profit companies of universities underneath the federal government, which lead to universities like Corinthian university and ITT Technical Institute shutting down.
And even though the university runs debt-free and does not intend to accept financial obligation, it might possibly conserve through reduced rates of interest if it made a decision to accept debt, web web web Page stated.
Exactly just How BJU will undoubtedly be structured
On March 1, Bob Jones University, Inc. should be renamed Bob Jones Education Group, Inc. and can remain the universityвЂ™s entity that is taxable will donate approximately half its assets towards the non-taxable BJU, Inc.
The universityвЂ™s assets will efficiently be split amongst the two companies.
BJU, Inc. includes the university & most of their facilities, the art museum, primary college and son or daughter development center. BJU Press article writers will also come underneath the umbrella of BJU, Inc.
The arm that is for-profit of college вЂ“ Bob Jones Education Group, Inc. вЂ“ includes the BJU Press, University Cleaners together with 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 board that is eight-member govern Bob Jones Education Group.
The change procedure started in belated 2014 having research of just how to attain taxation exemption. Final might 5, the Board of Trustees authorized the last policy for pursuing income tax exemption therefore the management happens to be attempting to implement it subsequently.
In addition, the college is searching for local certification through the Southern Association of Colleges and Schools Commission on Colleges. The college, that will be detailed as an applicant for certification, notified the payment of the possible modifications, which wouldnвЂ™t influence its candidacy, web web Page stated.
The university delivered SACSCOC along with its proposition arrange for taxation exemption and there’s no noticeable improvement in governance, stated Pamela Cravey, SACSCOC spokeswoman.
“The action had been an IRS matter and didn’t represent a change that is substantive” Cravey stated,
SACSCOC has considered the college as being a not-for-profit, she stated.