Bob Jones University v. United States

By Randall Roden

January 20th, 2021 is looming and the courts could potentially be faced with some very difficult decisions. An interesting case about the Supreme Court and what can happen during a change in the presidential administration with a different political party than its predecessor is Bob Jones University v. United States, 461 U.S. 574 (1983).  The IRS had revoked the tax-exempt status of Bob Jones University, a private religious school, based on racial discrimination.  After a ruling in the Fourth Circuit against BJU, the case was before the Supreme Court.

When Regan was elected, his administration sought to announce a new policy on matters of race, which caused it to change the legal position of the United States in this controversial case.  There was disagreement about how to proceed, but after consulting the career staff for tax and civil rights in the Solicitor General’s office, a new strategy was devised for the case.  Since granting or denying tax-exempt status was an executive branch decision that could be accomplished without court approval, the IRS would simply give BJU back its tax-exempt status and the Government would then ask the Court to dismiss the case as moot.  The IRS did grant BJU tax-exempt status, but the Supreme Court ignored the mootness argument and allowed the case to continue.

The Supreme Court’s reaction to the Government’s change of legal position was very unusual.  On its own motion, the Court appointed William Coleman as amicus curiae in support of the Fourth Circuit’s decision – in effect leaving the Government with two different legal positions in the same case.  Coleman was African American, head of the D.C. office of O’Melveny & Myers, and a Harvard law grad. He had both clerked for the Justice Frankfurter and had been Secretary of Transportation under President Ford.  In the end, the Supreme Court ruled in Coleman’s favor as far as the result was concerned, agreeing that BJU was not entitled to tax-exempt status, but it avoided the major constitutional issues by basing the decision on a statutory interpretation of the Internal Revenue Code.

In the end, the courts found that the IRS was correct in its decision to revoke the tax-exempt status of Bob Jones University. Because of their racially discriminatory policies, BJU did not mean the requirements laid out which included providing “beneficial and stabilizing influences in community life”. Their failing to meet this was directly correlated with their poor policies.

Changes of position and policy will undoubtedly be announced by the Biden administration, so it will be interesting to see how an entirely different Supreme Court, 40 years later, will deal with similar puzzles. Changing of administrations is always an influential time and 2021 looks to be no different. We look forward to continuing to follow along throughout the transition and observe what decisions the courts make this time.

Learn more about Bob Jones University v. United States here.