Bob Jones University v. United States
Citation: 461 U.S. 574 (U.S. Supreme Court, 1983)
Facts
Bob Jones University, a private Christian school, maintained racially discriminatory admissions and conduct policies (forbidding interracial dating and marriage) based on its religious beliefs. The IRS revoked the University’s tax-exempt status under section 501(c)(3) of the Internal Revenue Code, which exempts “charitable” organizations, concluding that racial discrimination was contrary to public policy and thus disqualified the University from charitable status. The University argued that neither the statute nor the Constitution permitted the revocation.
Issue
Does the IRS have authority to deny tax-exempt status to racially discriminatory private schools under section 501(c)(3), and if so, is such denial constitutional?
Holding
The Supreme Court (8–1, Burger, C.J.) upheld the IRS’s revocation. Section 501(c)(3)‘s requirement of “charitable” status incorporates common-law principles requiring that exempt organizations not be contrary to public policy. The federal policy against racial discrimination in education — established by Brown and subsequent legislation — provided a sufficient public-policy basis for revocation.
Rule
Statutory terms with common-law heritage (like “charitable”) should be interpreted in light of the common-law background and evolving public policy, not just the text. The IRS may, without explicit congressional authorization for each specific case, deny exempt status to organizations whose practices violate clear federal public policy.
Significance
Bob Jones is a significant purposivism case: the IRS exercised authority not expressly granted in the statute but derived from background common-law notions of “charity” and inferred congressional intent against racial discrimination. It illustrates how agencies and courts use public policy and legislative context to fill statutory gaps. The case also raises enduring tensions between anti-discrimination policy and religious liberty.