Bob Jones University V United States of America

Assignment 4, September 23, Diahann Jacquez

Case: Bob Jones University v United States (1983)

Cite: 461 U.S. 574


Bob Jones University was dedicated to "fundamentalist Christian beliefs" which included prohibitions against interracial dating and marriage. In 1970, the Internal Revenue Service (IRS) changed its formal policy to adopt a district court decision that prohibited the IRS from giving tax-exempt status to private schools engaging in racial discrimination. The IRS believed that the University's policies amounted to racism and revoked its tax-exempt status. The University claimed that the IRS had violated their rights under the Religion Clauses of the First Amendment. The University was notified November 30, 1970 that the IRS was planning on revoking its tax exempt status as a "religious, charitable. . . or educational" institution. In response, the University filed suit.

The IRS again notified the University on April 16, 1975 of the proposed revocation. Officially, the IRS revoked the University's tax exempt status on January 19, 1976. The University paid $21 in unemployment taxes for one employee for tax year 1975 and then filed for a refund in the United States District Court for the District of South Carolina. The Government counterclaimed for unpaid federal unemployment taxes for the taxable years 1971 through 1975, in the amount of $489,675.59, plus interest.
After paying a portion of the federal unemployment taxes the University filed a refund action in Federal District Court.   The Government counterclaimed for unpaid taxes for that and other taxable years. Holding that the IRS exceeded its powers in revoking the University's tax-exempt status and violated the University's rights under the Religion Clauses of the First Amendment, the District Court ordered the IRS to refund the taxes paid and rejected the counterclaim. The Court of Appeals reversed the decision.
The Law in Question

The court is asked to interpret the...