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Bob Jones University regains nonprofit status 17 years after it dropped discriminatory policy

Bob Jones University regains nonprofit status 17 years after it dropped discriminatory policy

BJU entrance (Picture: File)

In a move that is been a lot more than 2 yrs into the creating, Bob Jones University announced Wednesday it can 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 situation ended up being the refusal that is university’s enable interracial relationship or wedding among pupils, staff or faculty of this 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 CNN’s Larry King reside in 2000. In 2008, last President Stephen Jones, great-grandson of university and evangelist creator Bob Jones, apologized for BJU’s past racial discrimination.

However the college hadn’t wanted to reinstate its tax-exempt status until 2014 after Steve Pettit took over since the school’s 5th president in its 90-year history.

“Organizing being an entity that is tax-exempt one thing BJU has needed seriously to do for quite a while,” Pettit said.

In the meeting that is first with university’s Cabinet, Pettit said he believed it absolutely was right for BJU to find its tax-exempt status since the college does not think the jobs it once held about battle.

Pettit called the university’s racist policies an issue that is social had not been biblical.

“The Bible is quite clear,” Pettit stated while he announced the change into the college Wednesday evening. “We are constructed with one bloodstream.”

Bob Jones University destroyed its income tax exemption after having a 13-year struggle 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 black colored pupils until 1971, 17 years after Brown vs. Board of Education. After that Hookup log in it wouldn’t admit any pupils who have been in a mixed-race marriage and produced guidelines to prohibit pupils from interracial relationship.

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

The situation was cited times that are many the years. Of late, it arose in a change prior to the Supreme Court when you look at the Obergefell vs. Hodges choice, which legalized gay wedding. From then on choice, the IRS commissioner stated the agency wouldn’t normally target the tax-exempt status of spiritual organizations that oppose homosexual wedding.

It’s taken two-and-a-half years for BJU to perform the reorganization as it utilized a plan that is complicated separate its company into two entities aided by the college dropping beneath the umbrella of their elementary school’s current non-profit status to quickly attain a unique, in accordance with university statements and organization documents filed using the sc Secretary of State together with IRS.

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

The restructuring arrived after “consultation with a lawyer and accountants with numerous several years of expertise in 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 correspondence that is formal conversations utilizing the IRS, stated Randy web web Page, BJU spokesman.

The college is currently detailed as a 501(c)(3) nonprofit regarding the IRS internet site, said Michael Dobzinski, IRS spokesman.

What it indicates

Up to now, if people in the city or alumni desired to subscribe to the college, their gift ideas had been just taxation deductible when they offered to specific nonprofit arms associated with the college, such as for example its scholarship investment, art museum or athletic foundation.

Donors couldn’t offer tax-deductible presents to the university it self to support money promotions and for college initiatives.

All the big gift suggestions towards the college recently, just like a $500,000 present through the Sargant Foundation in December and a $1 million anonymous gift announced final November, went toward its BJU Scholarship Fund, a nonprofit entity associated with the college.

Now donors’ gift suggestions will likely be tax-deductible, web web Page stated.

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

The change would affect students’ n’t grants or scholarships and wouldn’t influence workers, he stated.

The change amounts the playing field between your college along with other sis organizations whenever trying to get funds, he stated.

It moves BJU from the for-profit university to a nonprofit category utilizing the U.S. Department of Education, “which is generally sensed more favorably by the public,” web web Page stated.

That modification could show crucial because the U.S. Department of Education has targeted colleges that are for-profit added oversight in modern times and fined a few for-profit systems of universities beneath the national government, which led to universities like Corinthian university and ITT Technical Institute shutting down.

And even though the college runs debt-free and does not want to accept financial obligation, it might potentially save yourself through reduced rates of interest if it thought we would accept financial obligation, web web Page stated.

Exactly just How BJU are going to be organized

On March 1, Bob Jones University, Inc. will likely 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 involving the two companies.

BJU, Inc. should include the university & most of its facilities, the art museum, elementary college and kid development center. BJU Press authors will also come underneath the umbrella of BJU, Inc.

The arm that is for-profit of college – Bob Jones Education Group, Inc. – should include the BJU Press, University Cleaners in addition to 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 eight-member board to govern Bob Jones Education Group.

The change procedure started in belated 2014 having research of simple tips to achieve income tax exemption. Final might 5, the Board of Trustees authorized the plan that is final pursuing taxation exemption as well as the management happens to be attempting to implement it subsequently.

At precisely the same time, the college was looking for local certification through the Southern Association of Colleges and Schools Commission on Colleges. The college, that will be listed as an applicant for certification, notified the payment of the prospective changes, which wouldn’t influence its candidacy, web Page stated.

The university offered SACSCOC having its proposition arrange for income tax exemption and there’s no noticeable improvement in governance, stated Pamela Cravey, SACSCOC spokeswoman.

“The action ended up being an IRS matter and failed to represent a change that is substantive” Cravey stated,

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

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