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 couple of years into the generating, Bob Jones University announced Wednesday it could 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 into the court situation ended up being the university’s refusal to enable interracial relationship or wedding among pupils, staff or faculty associated with the 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 CNN’s Larry King are now living in 2000. In 2008, last President Stephen Jones, great-grandson of evangelist and college creator Bob Jones, apologized for BJU’s past racial discrimination.

Nevertheless the college hadn’t tried 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 as being a tax-exempt entity is something BJU has necessary to do for a long time,” Pettit stated.

In their meeting that is first with university’s Cabinet, Pettit said he thought it had been suitable for BJU to get 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 an issue that is social wasn’t biblical.

“The Bible is extremely clear,” Pettit stated as he announced the alteration towards the college Wednesday evening. “We are constructed with one blood.”

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

The scenario rose into the Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status since the government’s fascination with eradicating racial discrimination from training overrode the university’s First Amendment liberties to spiritual free speech.

The outcome happens to be cited several times through the years. Lately, it arose within an 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 achieve the reorganization since it utilized a complicated intend to divide its company into two entities using the college dropping underneath the umbrella of its primary school’s current non-profit status to obtain a unique, in accordance with university statements and company documents filed using the sc Secretary of State and also the IRS.

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

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

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

The college has become detailed as a 501(c)(3) nonprofit from the IRS internet site, said Michael Dobzinski, IRS spokesman.

What it indicates

Up to now, if users of the city or alumni desired to subscribe to the college, their gift suggestions had been only income tax deductible when they provided to particular nonprofit hands of this college, such as for example its scholarship investment, art museum or athletic foundation.

Donors couldn’t offer tax-deductible gift suggestions to the college it self to support money promotions or even for college initiatives.

All of the big gift suggestions to your college recently, just like a $500,000 gift 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 associated with college.

Now donors’ presents will soon be tax-deductible, web web Page stated.

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

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

The change amounts the playing field amongst the college as well as other sis organizations whenever trying to get funds, he said.

Moreover it moves BJU from a college that is for-profit a nonprofit category utilizing the U.S. Department of Education, “which is generally sensed more positively because of the public,” web web Page stated.

That modification could show crucial since the U.S. Department of Education has targeted for-profit universities with added oversight in the last few years and fined a few for-profit networks of universities underneath the federal government, which triggered universities like Corinthian university and ITT Technical Institute shutting down.

And even though the college operates debt-free and does not intend to accept financial obligation, it may potentially save yourself through reduced rates of interest if it made a decision to undertake debt, web web web Page stated.

Exactly How BJU will soon be organized

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

The assets that are university’s efficiently be split between your two companies.

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

The for-profit supply of this college – Bob Jones Education Group, Inc. – should include the BJU Press, University Cleaners as well as the Bob Jones Academy center and high schools.

The college will still be governed by its 25-member Board of Trustees. The board will appoint a unique 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 taxation exemption. Final might 5, the Board of Trustees authorized the final policy for pursuing income tax exemption plus the management is trying to implement it ever since then.

At exactly the same time, the university happens to be looking for local certification through the Southern Association of Colleges and Schools Commission on Colleges. The college, which can be 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 having its proposition arrange for income tax exemption and there’s no improvement in governance, stated Pamela Cravey, SACSCOC spokeswoman.

“The action ended up being Catholic Singles mobile site an IRS matter and would not represent a change that is substantive” Cravey stated,

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