In a move thatвЂ™s been a lot more than 2 yrs into the creating, Bob Jones University announced Wednesday it might regain its federal status that is tax-exempt March 1, significantly more than three years following the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.
The problem when you look at the court situation had been the universityвЂ™s refusal to enable 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 ban that is dating 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.
Nevertheless 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 being a tax-exempt entity is one thing BJU has needed seriously to do for a long time,вЂќ Pettit stated.
Inside the meeting that is first with universityвЂ™s Cabinet, Pettit said he thought it had been suitable for BJU to get its tax-exempt status as the college does not think the jobs it once held about battle.
Pettit called the universityвЂ™s racist policies a social problem that had not been biblical.
вЂњThe Bible is extremely clear,вЂќ Pettit stated while he announced the alteration towards the college Wednesday evening. вЂњWe are constructed with one bloodstream.вЂќ
Bob Jones University lost its income tax 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 religious institution that is educational. The college didnвЂ™t acknowledge any students that are black 1971, 17 years after Brown vs. Board of Education. After that it wouldnвЂ™t admit any pupils who have been in a marriage that is mixed-race developed rules to prohibit pupils from interracial relationship.
The situation rose towards the Supreme Court, which ruled in 1983 that the IRS could revoke the universityвЂ™s tax-exempt status as the governmentвЂ™s desire for eradicating racial discrimination from training overrode the universityвЂ™s First Amendment liberties to religious speech that is free.
The outcome is cited times that are many the years. Of late, it arose in a change prior to the Supreme Court within the Obergefell vs. Hodges choice, which legalized marriage that is gay. After that choice, the IRS commissioner stated the agency wouldn’t normally target the tax-exempt status of spiritual organizations that oppose homosexual wedding.
ItвЂ™s taken two-and-a-half years for BJU to achieve the reorganization as it utilized an elaborate intend to separate its company into two entities because of the college dropping beneath the umbrella of their primary schoolвЂ™s current non-profit status to quickly attain its very own, based on college statements and company documents filed using the sc Secretary of State plus the 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 вЂњconsultation with a lawyer and accountants with numerous many years of experience with assisting tax exempt organizationsвЂ”as well as input from people in the BJU community and 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 utilizing the IRS, stated Randy Page, BJU spokesman.
The college has become detailed as being a 501(c)(3) nonprofit in the IRS internet site, stated Michael Dobzinski, IRS spokesman.
What this means
So far, if people in the city or alumni wished to contribute to the college, their gift ideas had been just taxation deductible when they offered to particular nonprofit hands associated with college, such as for example its scholarship investment, art museum or foundation that is athletic.
Donors couldnвЂ™t offer tax-deductible presents to the university itself to simply help with money campaigns or even for college initiatives.
Almost all of the big presents into the college recently, just like a $500,000 gift 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 college.
вЂњIt helps when youвЂ™re attempting to raise cash for a company to own a tax-exempt status,вЂќ web web Page stated. вЂњThat clearly helps your development people, your development people and the ones in the neighborhood вЂ“ organizations, people, alumni вЂ“ making it simpler to subscribe to a nonprofit.вЂќ
The alteration would affect studentsвЂ™ nвЂ™t grants or scholarships and wouldnвЂ™t influence employees, he stated.
The change amounts the playing field amongst the college along with other sibling organizations whenever trying to get funds, he stated.
It moves BJU from the for-profit college to a nonprofit category with all the U.S. Department of Education, вЂњwhich is generally recognized more positively because of the public,вЂќ web Page stated.
That modification could show essential given that U.S. Department of Education has targeted colleges that are for-profit additional oversight in the last few years and fined a few for-profit systems of universities underneath the national government, which lead to universities like Corinthian university and ITT Technical Institute shutting down.
And although the college runs debt-free and does not want to accept debt, it may possibly conserve through reduced rates of interest if it decided to undertake financial obligation, web web Page stated.
Exactly How BJU is going to be organized
On March 1, Bob Jones University, Inc. are going to be renamed Bob Jones Education Group, Inc. and certainly will remain the universityвЂ™s entity that is taxable will donate approximately half its assets towards the non-taxable BJU, Inc.
The universityвЂ™s assets will efficiently be split between your two companies.
BJU, Inc. should include the university & most of its facilities, the art museum, primary college and youngster development center. BJU Press article writers will also come underneath the umbrella of BJU, Inc.
The for-profit supply regarding the college вЂ“ Bob Jones Education Group, Inc. вЂ“ includes the BJU Press, University Cleaners therefore 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 a brand new eight-member board to govern Bob Jones Education Group.
The change process began in belated 2014 by having research of just how to attain taxation exemption. Final might 5, the Board of Trustees authorized the plan that is final pursuing taxation exemption and also the management happens to be trying to implement it ever since then.
The university has been seeking regional accreditation through the Southern Association of Colleges and Schools Commission on Colleges at the same time. The college, which can be detailed as an applicant for certification, notified the payment of their possible modifications, which wouldnвЂ™t influence its candidacy, web Page said.
The college delivered SACSCOC using its proposal policy for taxation exemption and there’s no improvement in governance, stated Pamela Cravey, SACSCOC spokeswoman.
« The action had been an IRS matter and would not constitute a substantive modification, » Cravey stated,
SACSCOC has considered the college as a not-for-profit, she stated.