BJU entrance (Picture: File)
In a move that is been a lot more than couple of years into the creating, Bob Jones University announced Wednesday it can regain its federal tax-exempt status on March 1, significantly more than three decades following the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.
The problem when you look at the court instance had been the universityвЂ™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 CNNвЂ™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 BJUвЂ™s past racial discrimination.
However the college hadnвЂ™t looked for to reinstate its tax-exempt status until 2014 after Steve Pettit took over since the schoolвЂ™s president that is fifth its 90-year history.
вЂњOrganizing as a tax-exempt entity is one thing BJU has needed seriously to do for quite a while,вЂќ Pettit stated.
In the very first meeting with the universityвЂ™s Cabinet, Pettit said he thought it had been right for BJU to get its tax-exempt status since the college does not think the roles it once held about battle.
Pettit called the universityвЂ™s racist policies an issue that is social had not been biblical.
вЂњThe Bible is extremely clear,вЂќ Pettit stated while he announced the alteration into the college Wednesday evening. вЂњWe are constructed of one bloodstream.вЂќ
Bob Jones University destroyed its taxation exemption after a 13-year fight with the IRS over whether or not the universityвЂ™s policies against interracial relationship precluded it as 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 who have been in a marriage that is mixed-race produced guidelines to prohibit pupils from interracial relationship.
The actual situation rose into the Supreme Court, which ruled in 1983 that the IRS could revoke the universityвЂ™s tax-exempt status since the governmentвЂ™s fascination with eradicating racial discrimination from training overrode the universityвЂ™s First Amendment liberties to religious free message.
The outcome happens to be cited times that are many the years. Most recently, it arose in a trade ahead of the Supreme Court into 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 complete the reorganization given that it used an elaborate intend to divide its company into two entities using the university dropping underneath the umbrella of their primary schoolвЂ™s current non-profit status to obtain unique, in accordance with college statements and company documents filed using the sc Secretary of State while the IRS.
That nonprofit that is existing called Bob Jones Elementary class, Inc. until final might, with regards to ended up being renamed BJU, Inc.
The restructuring arrived after вЂњconsultation with lawyer and accountants with numerous many years of experience with assisting taxation 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 formal communication and conversations because of the IRS, stated Randy web web Page, BJU spokesman.
The college has become detailed being a 501(c)(3) nonprofit regarding the IRS site, stated Michael Dobzinski, IRS spokesman.
What this means
So far, if people in the city or alumni desired to subscribe to the college, their gift suggestions had been just taxation deductible when they provided to specific nonprofit hands for the college, such as for instance its scholarship investment, art museum or foundation that is athletic.
Donors couldnвЂ™t offer gifts that are tax-deductible the college itself to simply help with money promotions or even for college initiatives.
All the big presents 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 regarding the university.
Now donorsвЂ™ gift ideas will undoubtedly be tax-deductible, web web Page said.
вЂњIt helps when youвЂ™re attempting to raise cash for a business to own a status that is tax-exemptвЂќ web Page stated. вЂњThat clearly assists your advancement people, your development people and the ones in the community вЂ“ organizations, individuals, alumni вЂ“ to really make it much easier to subscribe to a nonprofit.вЂќ
The alteration wouldnвЂ™t affect pupilsвЂ™ grants or scholarships and wouldnвЂ™t affect workers, he stated.
The change amounts the playing field involving the college along with other sis organizations whenever trying to get grants, he stated.
Moreover it moves BJU from a for-profit college to a nonprofit category using the U.S. Department of Education, вЂњwhich is generally sensed more positively by the public,вЂќ web web web Page stated.
That change could show crucial due to the fact U.S. Department of Education has targeted for-profit universities with added oversight in the last few years and fined a few for-profit systems of colleges underneath the federal government, which triggered universities like Corinthian university and ITT Technical Institute shutting down.
And even though the university runs debt-free and does not want to accept financial obligation, it may possibly conserve through reduced interest rates if it decided to accept financial obligation, web web Page stated.
How BJU will likely to be organized
On March 1, Bob Jones University, Inc. will likely be renamed Bob Jones Education Group, Inc. and certainly will remain the universityвЂ™s entity that is taxable will donate approximately half its assets into the non-taxable BJU, Inc.
The assets that are universityвЂ™s efficiently be split involving the two businesses.
BJU, Inc. includes the university & most of its facilities, the art museum, primary school and kid development center. BJU Press article writers will also come beneath the umbrella of BJU, Inc.
The for-profit supply of this university вЂ“ Bob Jones Education Group, Inc. вЂ“ should include the BJU Press, University Cleaners as well as the Bob Jones Academy center and high schools.
The college will nevertheless be governed by its 25-member Board of Trustees. The board will appoint an innovative new board that is eight-member govern Bob Jones Education Group.
The change procedure started in belated 2014 having a scholarly research of how exactly to achieve taxation exemption. Final May 5, the Board of Trustees authorized the last policy for pursuing taxation exemption while the management happens to be attempting to implement it ever since then.
As well, the college was 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 its potential modifications, which wouldnвЂ™t influence its candidacy, web web web Page stated.
The college provided SACSCOC having its proposition policy for income tax exemption and there’s no noticeable improvement in governance, said Pamela Cravey, SACSCOC spokeswoman.
“The action had been an IRS matter and would not represent a change that is substantive” Cravey stated,
SACSCOC has considered the college being a not-for-profit, she said.