TAX-EXEMPT STATUS OF DISCRIMINATORY SCHOOLS

WHEREAS, on January 8, 1982, the U.S. Treasury Department announced that without further guidance from Congress, the Internal Revenue Service will no longer revoke or deny tax-exempt status for religious, charitable, educational or scientific organizations on the ground that they discriminate; and

WHEREAS, this action was taken on advice from the Justice Department that the IRS has no legislative authority to "deny tax-exempt status to otherwise eligible organizations on the ground that their policies or practices do not conform to notions of national public policy;" and

WHEREAS, this Jan. 8, 1982, decision reverses a policy that has been in force for eleven years, and

WHEREAS, the 1970 ruling of the IRS commissioner, to deny tax-exempt status to organizations that dis­criminated on the basis of race or color was based in part on Section 601 of the U.S. Civil Rights Act of 1964, Title Vl , which states as follows:

"No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied benefits of, or be subject to discrimination under any program or activity receiving federal financial assistance;" and

WHEREAS, this policy has been upheld by three different administrations and various court decisions; and

WHEREAS, the recent policy change may benefit some 100 non-profit organizations including the Bob Jones University and the Goldsboro Christian Schools which admit to discrimination on the basis of race; and

WHEREAS, the president of the United States has announced his position that institutions that discriminate should be denied the tax-exempt status, but that legislative action is necessary to grant such authority to the IRS; and

WHEREAS, there is a sharp difference of opinion among members of the 97th Congress and among the staff of the Justice Department concerning the need for additional legislative authority to support the 1970 ruling of the IRS commissioner; and

WHEREAS, the U.S. Supreme Court is scheduled to hear the appeal in the case of the Bob Jones University and the Goldsboro Christian Schools to clarify the constitutional issues under debate; and

WHEREAS, the U.S. District Court, in the Green v. Conally case has ordered the denial of tax-exemption to all schools in Mississippi that discriminate on the basis of race or color and that order was affirmed by the Supreme Court; and

WHEREAS, this confusion regarding official public policy on the basis of race or color may provide encouragement to persons or organizations that are currently discriminating or wish to establish private tax-exempt institutions which will discriminate; and

WHEREAS, the Jan. 8, 1982, policy reversal, if allowed to stand, represents a federal government sanc­tion of racially segregated private schools:

RESOLVED, that the American Federation of Teachers urges the president of the United States to reinstate the 1970 IRS ruling and to refrain from granting the benefit of tax-exempt status to institutions that discriminate on the basis of race, color or national origin; and

RESOLVED, that the president of the American Federation of Teachers and the executive council be authorized to take appropriate action in support of this position.