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

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

BJU entrance (Picture: File)

In a move that is been a lot more than 2 yrs into the creating, Bob Jones University announced Wednesday it might regain its federal tax-exempt status on March 1, significantly more than three years following the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.

The matter when you look at the court situation ended up being the refusal that is university’s enable interracial relationship or wedding among pupils, staff or faculty for the college, a guideline this has since abandoned.

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

Nevertheless the college hadn’t wanted to reinstate its tax-exempt status until 2014 after Steve Pettit took over because the school’s 5th president in its 90-year history.

“Organizing being an entity that is tax-exempt one thing BJU has had a need to do for a long time,” Pettit stated.

Inside the very first ending up in the university’s Cabinet, Pettit said he thought it absolutely was right for BJU to find its tax-exempt status considering that the college does not think the positions it once held about competition.

Pettit called the university’s racist policies an issue that is social wasn’t biblical.

“The Bible is quite clear,” Pettit stated as he announced the alteration into the university Wednesday evening. “We are constructed with one bloodstream.”

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

The way it is rose to your Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status as the government’s desire for eradicating racial discrimination from training overrode the university’s First Amendment legal rights to religious free message.

The situation is cited times that are many many years. Of late, it arose within an trade ahead of the Supreme Court within the Obergefell vs. Hodges choice, which legalized homosexual wedding. From then on choice, the IRS commissioner said the agency wouldn’t normally target the tax-exempt status of religious organizations that oppose homosexual wedding.

It’s taken two-and-a-half years for BJU to complete the reorganization since it utilized an intricate want to separate its company into two entities aided by the college dropping beneath the umbrella of their primary school’s current non-profit status to attain a unique, in accordance with college statements and company documents filed using the sc Secretary of State together with IRS.

That current nonprofit ended up being called Bob Jones Elementary class, Inc. until final might, when it had been renamed BJU, Inc.

The restructuring arrived after “consultation with a lawyer and accountants with several many years of experience with 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 primary college had been a nonprofit, although the college had formal communication and conversations using the IRS, stated Randy web web Page, BJU spokesman.

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

What it indicates

As yet, if users of the city or alumni wished to subscribe to the college, their gift ideas had been just income tax deductible should they offered to specific nonprofit hands of this college, such as for instance its scholarship investment, art museum or athletic foundation.

Donors couldn’t offer gifts that are tax-deductible the university itself to simply help with money promotions and for university initiatives.

The majority of the big gift suggestions to your college recently, just like a $500,000 present through the Sargant Foundation in December and a $1 million anonymous present announced final November, went toward its BJU Scholarship Fund, a nonprofit entity associated with college.

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

“It helps whenever you’re attempting to raise cash for a business to own a tax-exempt status,” web web web Page stated. “That clearly assists your development people, your development people and people in the neighborhood – organizations, people, alumni – making it more straightforward to subscribe to a nonprofit.”

The alteration wouldn’t affect pupils’ grants or scholarships and wouldn’t affect workers, he stated.

The change amounts the playing field between your college along with other sibling institutions whenever trying to get funds, he stated.

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

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

And although the college runs debt-free and does not intend to accept financial obligation, it may possibly save your self through reduced rates of interest if it made a decision to accept financial obligation, web web Page stated.

Exactly just How BJU may be organized

On March 1, Bob Jones University, Inc. will undoubtedly be renamed Bob Jones Education Group, Inc. and certainly will remain the university’s taxable entity and will donate approximately half its assets towards the non-taxable BJU, Inc.

The assets that are university’s efficiently be split involving the two businesses.

BJU, Inc. should include the university and a lot of of the facilities, the art museum, primary college and youngster development center. BJU Press article writers will also come beneath the umbrella of BJU, Inc.

The for-profit supply associated with the 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 with a scholarly research of just how to attain income tax exemption. Final might 5, the Board of Trustees authorized the last policy for pursuing taxation exemption together with management happens to be trying to implement it ever since then.

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 an applicant for certification, notified the payment of their changes that are potential which wouldn’t influence its candidacy, web web Page stated.

The college offered SACSCOC along with 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 change that is substantive” Cravey stated,

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

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