BJU entrance (Picture: File)
In a move that is been significantly more than couple of years 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 problem into the court instance ended up being the refusal that is university’s allow interracial relationship or wedding among pupils, staff or faculty for 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 reside 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 wanted to reinstate its tax-exempt status until 2014 after Steve Pettit took over whilst the school’s 5th president in its 90-year history.
“Organizing as an entity that is tax-exempt one thing BJU has had a need to do for quite a while,” Pettit said.
In the very first meeting with the university’s Cabinet, Pettit said he believed it absolutely was suitable for BJU to find its tax-exempt status as the university 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 quite clear,” Pettit stated as he announced the alteration to your college Wednesday evening. “We are constructed with one bloodstream.”
Bob Jones University destroyed its income tax exemption after having a 13-year fight with the IRS over perhaps the university’s policies against interracial relationship precluded it as a non-taxable spiritual academic organization. The college didn’t acknowledge any students that are black 1971, 17 years after Brown vs. Board of Education. After that it wouldn’t acknowledge any pupils who had been in a marriage that is mixed-race produced guidelines to prohibit pupils from interracial dating.
The outcome rose towards the Supreme Court, which ruled in 1983 that the IRS could revoke the university’s tax-exempt status considering that the government’s desire for eradicating racial discrimination from training overrode the university’s First Amendment legal rights to spiritual free message.
The truth happens to be cited times that are many many years. Lately, it arose within an change prior to the Supreme Court within the Obergefell vs. Hodges choice, which legalized marriage that is gay. From then on choice, the IRS commissioner stated the agency will never target the tax-exempt status of spiritual organizations that oppose homosexual wedding.
It’s taken two-and-a-half years for BJU to complete the reorganization given that it utilized a plan that is complicated separate its company into two entities using the college falling underneath the umbrella of its elementary school’s current non-profit status to reach a unique, relating to college statements and company documents filed using the South Carolina Secretary of State in addition to IRS.
That current nonprofit ended up being 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 many years of experience with assisting taxation exempt organizations—as well as input from users of the BJU community and our congressional delegation,” Pettit stated.
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The alteration didn’t need IRS approval because its primary college had been a nonprofit, although the college had correspondence that is formal conversations using the IRS, stated Randy web web Page, BJU spokesman.
The college has become detailed as a 501()( that is c) nonprofit from the IRS web site, said Michael Dobzinski, IRS spokesman.
What this means
So far, if people in the city or alumni wished to subscribe to the college, their gift ideas had been only income tax deductible when they provided to specific nonprofit hands regarding the college, such as for instance its scholarship investment, art museum or athletic foundation.
Donors couldn’t provide gifts that are tax-deductible the college it self to support money promotions and for college initiatives.
All of the big gift ideas into the college recently, like a $500,000 present through the Sargant Foundation in December and a $1 million anonymous present announced last November, went toward its BJU Scholarship Fund, a nonprofit entity associated with the college.
Now donors’ presents will undoubtedly be tax-deductible, web Page stated.
“It helps whenever you’re attempting to raise cash for a business to own a tax-exempt status,” web Page said. “That obviously 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 would affect students’ n’t grants or scholarships and wouldn’t influence workers, he stated.
The change amounts the playing field involving the college as well as other sis organizations whenever trying to get funds, he stated.
Moreover it moves BJU from a college that is for-profit a nonprofit category with all the U.S. Department of Education, “which is generally observed more positively because of the public,” web web web Page stated.
That modification could show crucial since the 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 College and ITT Technical Institute shutting down.
And although the college runs debt-free and does not want to accept financial obligation, it might possibly conserve through reduced interest levels if it made a decision to accept financial obligation, web web Page stated.
Exactly How BJU would be organized
On March 1, Bob Jones University, Inc. are 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 university’s assets will efficiently be split involving the two businesses.
BJU, Inc. should include the university & most of its facilities, the art museum, primary college and son or daughter development center. BJU Press writers will also come underneath the umbrella of BJU, Inc.
The for-profit supply associated with the university – Bob Jones Education Group, Inc. – includes the BJU Press, University Cleaners plus the Bob Jones Academy center and high schools.
The university 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 research of how exactly to attain taxation exemption. Final might 5, the Board of Trustees authorized the plan that is final pursuing income tax exemption in addition to management was attempting to implement it since that time.
In addition, the college happens to be looking for local certification through the Southern Association of Colleges and Schools Commission on Colleges. The college, that is detailed as an applicant for certification, notified the payment of the possible modifications, which wouldn’t influence its candidacy, web Page said.
The college offered SACSCOC along with its proposition policy for taxation exemption and there’s no improvement in governance, stated Pamela Cravey, SACSCOC spokeswoman.
“The action ended up being an IRS matter and didn’t represent a change that is substantive” Cravey stated,
SACSCOC has considered the college as a not-for-profit, she stated.
