At the same time, the IRS announced that it could not "treat gifts to such schools as charitable deductions for income tax purposes [under 170]." Ibid. Following the decision of the United States Court of Appeals for the Fourth Circuit in Mc Crary v. Since May 29, 1975, the University has permitted unmarried Negroes to enroll; but a disciplinary rule prohibits interracial dating and marriage. 725 (1974), in which this Court held that the Anti-Injunction Act of the Internal Revenue Code, 26 U. Thereafter, on April 16, 1975, the IRS notified the University of the proposed revocation of its tax-exempt status. What little floor debate occurred on the charitable exemption provision of the 1894 Act and similar sections of later statutes leaves no doubt that Congress deemed the specified organizations entitled to tax benefits because they served desirable public purposes. Prior to 1954, public education in many places still was conducted under the pall of Plessy v.
From 1971 to May 1975, the University accepted no applications from unmarried Negroes, 5 but did accept applications from Negroes married within their race. 160 (1976), prohibiting racial exclusion from private schools, the University revised its policy. 7421(a), prohibited the University from obtaining judicial review by way of injunctive action before the assessment or collection of any tax. These statements clearly reveal the legal background against which Congress enacted the first charitable exemption statute in 1894: 14 charities were to be given preferential treatment because they provide a benefit to society. But there can no longer be any doubt that racial discrimination in education violates deeply and widely accepted views of elementary justice. 537 (1896); racial segregation in primary and secondary education prevailed in many parts of the country. g., Segregation and the Fourteenth Amendment in the States (B.
Assistant Attorney General Reynolds argued the cause for the United States in both cases. 12 More than a century ago, this Court announced the caveat that is critical in this case: "[I]t has now become an established principle of American law, that courts of chancery will sustain and protect . The revised policy on discrimination was formalized in Revenue Ruling 71-447, 1971-2 Cum. 230: "Both the courts and the Internal Revenue Service have long recognized that the statutory requirement of being `organized and operated exclusively for religious, charitable, . To effectuate these views, Negroes were completely excluded until 1971. 585-586 "Evidently the exemption is made in recognition of the benefit which the public derives from corporate activities of the class named, and is intended to aid them when not conducted for private gain." Trinidad v. We are bound to approach these questions with full awareness that determinations of public benefit and public policy are sensitive matters with serious implications for the institutions affected; a declaration that a given institution is not "charitable" should be made only where there can be no doubt that the activity involved is contrary to a fundamental public policy. The court permanently enjoined the Commissioner of Internal Revenue from approving tax-exempt status for any school in Mississippi that did not publicly maintain a policy of nondiscrimination. or educational purposes' was intended to express the basic common law concept [of `charity']. The sponsors of the University genuinely believe that the Bible forbids interracial dating and marriage. 19 The institution's purpose must not be so at odds with the common community conscience as to undermine any public benefit that might otherwise be conferred. Parker for the Lawyers' Committee for Civil Rights Under Law; by Thomas I. Daye for the North Carolina Association of Black Lawyers; by Earle K. Upon audit of Goldsboro's records for the years 1969 through 1972, the IRS determined that Goldsboro was not an organization described in 501(c)(3), and therefore was required to pay taxes under the Federal Insurance Contribution Act and the Federal Unemployment Tax Act. Goldstein for the National Association for the Advancement of Colored People et al.; by Leon Silverman, Linda R. Mansfield for the National Association of Independent Schools; by Charles E. Goldsboro never received a determination by the IRS that it was an organization entitled to tax exemption under 501(c)(3). In 1891, in a restatement of the English law of charity 13 which has long been recognized as a leading authority in this country, Lord Mac Naghten stated: "`Charity' in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads." Commissioners v.