In a move that is been a lot more than couple of years into the creating, Bob Jones University announced Wednesday it could regain its federal status that is tax-exempt March 1, a lot more than three years following the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.
The problem into the court instance had been the refusal that is universityвЂ™s allow 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 CNNвЂ™s Larry King reside 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 tried to reinstate its tax-exempt status until 2014 after Steve Pettit took over once the schoolвЂ™s 5th president in its 90-year history.
вЂњOrganizing as an entity that is tax-exempt one thing BJU has had a need to do for a long time,вЂќ Pettit stated.
In the very first ending up in the universityвЂ™s Cabinet, Pettit said he thought it absolutely was suitable for BJU to find its tax-exempt status since the college does not think the roles it once held about competition.
Pettit called the universityвЂ™s racist policies a social problem that had not been biblical.
вЂњThe Bible is quite clear,вЂќ Pettit stated as he announced the alteration to your college Wednesday night. вЂњWe are constructed with one bloodstream.вЂќ
Bob Jones University destroyed its income tax exemption following a 13-year fight with the IRS over perhaps the universityвЂ™s policies against interracial relationship precluded it as being a non-taxable religious 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 students who had been in a mixed-race marriage and produced guidelines to prohibit pupils from interracial relationship.
The truth rose towards the Supreme Court, which ruled in 1983 that the IRS could revoke the universityвЂ™s tax-exempt status as the governmentвЂ™s fascination with eradicating racial discrimination from training overrode the universityвЂ™s First Amendment legal rights to spiritual free message.
The actual situation happens to be cited often times through the years. Of late, it arose in a 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.
ItвЂ™s taken two-and-a-half years for BJU to perform the reorganization since it utilized a plan that is complicated divide its company into two entities with all the university dropping beneath the umbrella of their primary schoolвЂ™s current non-profit status to attain a unique, based on college statements and organization documents filed using the sc Secretary of State plus the IRS.
That current nonprofit had been called Bob Jones Elementary class, Inc. until final May, with regards to had been renamed BJU, Inc.
The restructuring arrived after вЂњconsultation with a lawyer and accountants with many many years of expertise in assisting tax exempt organizationsвЂ”as well as input from people of the BJU community and our congressional delegation,вЂќ Pettit said.
The alteration didnвЂ™t need IRS approval because its elementary college had been a nonprofit, although the college had correspondence that is formal conversations using the IRS, stated Randy web Page, BJU spokesman.
The college happens to be listed as being a 501()( that is c) nonprofit in the IRS site, stated Michael Dobzinski, IRS spokesman.
What it indicates
So far, if people in the city or alumni desired to contribute to the college, their gift suggestions had been just taxation deductible should they offered to certain nonprofit hands of this college, such as for instance its scholarship fund, art museum or foundation that is athletic.
Donors couldnвЂ™t provide tax-deductible gift ideas to the college it self to support capital promotions or even for college initiatives.
A lot 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 regarding the university.
вЂњIt helps whenever youвЂ™re attempting to raise money for a company to own a status that is tax-exemptвЂќ web web Page stated. вЂњThat clearly assists your development people, your development people and people in the neighborhood вЂ“ organizations, individuals, alumni вЂ“ to really make it simpler to subscribe to a nonprofit.вЂќ
The alteration Christian Cafe quizzes wouldnвЂ™t affect pupilsвЂ™ financial aid and wouldnвЂ™t affect workers, he stated.
The change amounts the playing field amongst the college as well as other cousin organizations whenever trying to get funds, he stated.
It moves BJU from a college that is for-profit a nonprofit category using the U.S. Department of Education, вЂњwhich is generally recognized more positively because of the public,вЂќ Page said.
That modification could show essential due to the fact U.S. Department of Education has targeted colleges that are for-profit additional oversight in the past few years and fined a few for-profit systems of universities beneath the federal government, which led to universities like Corinthian university and ITT Technical Institute shutting down.
And although the college runs debt-free and does not plan to accept financial obligation, it might possibly save your self through lower rates of interest if it decided to accept financial obligation, web Page stated.
Exactly just How BJU will likely to be organized
On March 1, Bob Jones University, Inc. should be renamed Bob Jones Education Group, Inc. and can remain the universityвЂ™s taxable entity and will donate approximately half its assets to your non-taxable BJU, Inc.
The assets that are universityвЂ™s effortlessly be split involving the two businesses.
BJU, Inc. should include the university & most of their facilities, the art museum, primary college and son or daughter development center. BJU Press article writers will also come beneath the umbrella of BJU, Inc.
The for-profit supply regarding the college вЂ“ Bob Jones Education Group, Inc. вЂ“ should include the BJU Press, University Cleaners and also the Bob Jones Academy middle 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 with a scholarly research of how exactly to attain income tax exemption. Final May 5, the Board of Trustees authorized the final arrange for pursuing income tax exemption additionally the management was attempting to implement it subsequently.
On top of that, the university has been searching for local certification through the Southern Association of Colleges and Schools Commission on Colleges. The university, which can be detailed as an applicant for certification, notified the payment of their changes that are potential which wouldnвЂ™t influence its candidacy, web web Page stated.
The college provided SACSCOC along with its proposal 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 failed to represent a change that is substantive” Cravey stated,
SACSCOC has considered the college being a not-for-profit, she stated.