Rife with Latent Power: Exploring the Reach of the IRS to Determine Tax-Exempt Status According to Public Policy Rationale in an Era of Judicial Deference
40 Pages Posted: 6 May 2014 Last revised: 19 Mar 2016
Date Written: 2014
Using the case of Bob Jones University v. United States as a springboard, this article contends that the IRS has the legal authority to revoke the 501(c)(3) tax-exempt statuses of any institution that the IRS deems to be in violation of public policy. The first step to such an expansion might be to apply to private, religious universities that practice discrimination in areas other than race (e.g. gender and sexual orientation). This article traces the background and analysis of the Supreme Court decision in Bob Jones and how the Court left the door open for the IRS to make other public policy decisions and also considers how judicial deference and Chevron analysis could facilitate the choices of the IRS to determine public policy and status of exemptions.
Keywords: tax-exempt, higher education, charitable organizations, discrimination, deference, administrative law, Chevron analysis
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