Christian Churches And Schools Better Prepare For The End Of Tax Exempt Status

By Michael Farris

Justice Alito posed a predictable, but revealing question to Solicitor General Donald Verrilli, Jr., in the recent Supreme Court same-sex marriage oral argument: "In the Bob Jones case, the court held that a college was not entitled to tax exempt status if it opposed interracial marriage or interracial dating. So would the same apply to a university or a college if it opposed same-sex marriage?"

Verrilli replied that he would need to know more specifics, but allowed that "it's certainly going to be an issue. I don't deny that."

The solicitor general's answer should have been and probably was practiced. The question was unlikely to have surprised Verrilli, especially with the kind of preparation undertaken by the highest appellate lawyer for the United States in such high stakes situations. Such preparations would include multiple moot courts, simulated arguments with various lawyers playing the roles of each of the members of the Supreme Court trying to ask as many questions as possible.

As an appellate litigator and the coach of eight collegiate national moot court championship teams, I understand the goal of such preparation. You never want to hear a question from the bench that you have not thought about ahead of time.

Alito's question was premised on the Bob Jones University case from 1983 in which the IRS revoked the school's tax exempt status because of its policies on interracial dating and marriage. BJU defended on the basis of the free exercise of religion. The Supreme Court rejected their defense holding that the government's goal of eradicating racial discrimination in marriage was more important than BJU's religious rights.

So, the follow-up question from Alito's question is obvious: If the court rules in favor of same sex marriage, how can religious colleges that refuse to acknowledge such unions avoid BJU's fate?

No one should think that IRS implications will stop with colleges. Religious high schools, grade schools and any other religious institution will face the same outcome. And this includes churches.

All of these entities are exempt from taxation under the same section of the IRS code. And even though churches can be exempt without application, their exemption can nonetheless be revoked.

Even if it takes the IRS years to begin the enforcement proceedings against such institutions, we can expect other fallout from this decision to begin shortly after the release of the Supreme Court's opinion.

Colleges and universities that receive federal funding will be coerced into immediate compliance. Accreditation agencies will ratchet up their bullying of Christian institutions, as has already been done against Gordon College in Massachusetts. Threats to accreditation are fatal. Colleges may not legally operate in several states without it.

Christian colleges and churches need to get prepared. We must decide which is more important to us — our tax exemption or our religious convictions. Keep in mind, it is not the idea that the college itself might have to pay taxes that is the threat. Schools like Patrick Henry College, which I started, never run much of a profit. But since PHC refuses all government aid, all of our donations for scholarships and buildings come from tax deductible gifts. Cutting off that stream of revenue is effectively the end of such colleges absent a team of donors who simply don't care if gifts are deductible.

A slogan of the American Revolution, "We have no King but Jesus" may well be overturned by a 5 to 4 decision of the Supreme Court near the end of June.

As for other colleges, I cannot answer. But at Patrick Henry College we would egregiously deny our namesake's legacy, if we did not stand forthrightly for Christ and for liberty no matter what the cost.