Significance: In this case the Supreme Court held that racial discrimination could not be tolerated even when that discrimination takes places in the name of religious freedom.
Background: Until 1970 the Internal Revenue Service (IRS) generally gave all private schools tax-exempt status [freedom from paying federal taxes]. In 1970 the agency issued a ruling changing its policy. The IRS refused to grant tax exemption to schools that discriminated against students on the basis of race. In 1976 the IRS revoked the tax-exempt status of Bob Jones University because of its discriminatory policy against interracial marriage. The university refused to admit students who were involved in or approved of interracial marriages, claiming that such marriages were forbidden by the Bible. In 1975, after paying $21 in taxes for one employee, the university sued the U.S. government, claiming that it had violated the First Amendment’s freedom of religion by canceling the university’s tax-exempt status. The district court held that the IRS had exceeded its authority, and ordered it to refund the taxes paid. A court of appeals reversed this decision, ruling in favor of the U.S. government. Upon appeal to the U.S. Supreme Court, this case was argued with a similar one, Goldsboro Christian Schools, Inc. v. United States.
Decision: This case was argued on October 12, 1982, and decided on May 24, 1983, by a vote of 8 to 1. Chief Justice Warren Burger spoke for the Court, which ruled in favor of the United States. Justice William Rehnquist dissented. The Court judged that the school’s policy against interracial relationships discriminated on the basis of race. Because racial discrimination is against established public policy, the Court ruled that no school practicing such discrimination could be eligible for tax exemption.
Excerpt from the Opinion of the Court: “The Government has a fundamental, overriding interest in eradicating [eliminating] racial discrimination in education—discrimination that prevailed, with official approval, for the first 165 years of this Nation’s constitutional history. That governmental interest substantially outweighs whatever burden denial of tax benefits places on petitioners’ exercise of their religious beliefs.”
