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Tuesday, June 30, 2009

Buckles: Should Yale Lose its Tax Exemption Because of its Opposition to the Solomon Amendment?

Johnny Rex Buckles (Houston) has published Do Law Schools Forfeit Federal Income Tax Exemption When They Deny Military Recruiters Full Access to Career Services Programs? The Hypothetical Case of Yale University v. Commissioner, 41 Ariz. St. L.J. 1 (2009).  Here is the abstract:

Most U.S. law schools prohibit prospective employers who discriminate against students on any of several grounds, including sexual orientation, from utilizing the schools' student recruitment programs conducted by their career services offices. Because homosexuals who disclose their sexual orientation may not serve in the United States armed forces, some law schools at times have limited the channels through which military recruiters may interview students. In response to the application of these anti-discrimination policies to military recruiters, Congress enacted the Solomon Amendment. The Solomon Amendment eliminates certain federal funding otherwise available to an institution of higher education if it denies military recruiters the same access to its students and campus that other recruiting employers receive. Although the Supreme Court has recently upheld the constitutionality of the Solomon Amendment, another legal issue -- one that existing legal scholarship has never considered -- remains outstanding. The issue is whether private law schools that have denied military recruiters full access to student recruitment programs have forfeited their federal income tax exemption under ยง 501(c)(3) under the public policy doctrine announced in Bob Jones University v. United States. This article rigorously analyzes this provocative issue by positing a hypothetical Supreme Court case, Yale University v. Commissioner, in which four opinions written by fictional Supreme Court Justices determine the tax-exempt status of several private, free-standing law schools or their affiliated universities. This format not only facilitates an analysis of the nuances of the public policy doctrine, but also exposes and illustrates the vagaries of the doctrine. Building on Reforming the Public Policy Doctrine, 53 U. Kan. L. Rev. 397 (2005), this article concludes that the hypothetical case of Yale University v. Commissioner demonstrates that the public policy doctrine should be reformed.

http://taxprof.typepad.com/taxprof_blog/2009/06/buckles-.html

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Comments

The schools are hypocrites. The schools should be protesting by discouraging students from working in the legislative branch (which drafted the "compromise"), the executive branch (which requires the military to engage in the policy), and the federal courts (which have upheld the policy). If the schools had integrity, they would discourage their students from clerking in the federal courts before discouraging them from serving in the military. Military recruiters are not in control of the policy.

Posted by: Eric | Jun 30, 2009 4:37:29 PM

My understanding is that there are some stand-alone law schools that continue to deny access to military recruiters. (Law schools are not, in fact, big recipients of federal funding; it was the threat to cut off the science departments that caused the central administration at Yale et al. to crack down on the law school.) So this could be a real-life case.

Posted by: y81 | Jun 30, 2009 5:11:53 PM

Integrity and lawyers in the same sentence? What color is the sky on your planet?

Posted by: SDN | Jun 30, 2009 6:01:28 PM

The article asserts that stripping Bob Jones of its tax exemption was the correct result but that the public policy reason used should also lead to stripping Yale of its tax exemption.

Since stripping Yale of its tax exemption is so clearly wrong that the author doesn't even bother discussing it, the article concludes that the relevant policy should be changed.

It doesn't address the obvious question, namely whether Bob Jones should be allowed to get itx tax exemption back under the "reformed" policy.

It's things like this that demonstrate that the legal academy's primary purpose is advancing its own goals.

Posted by: Andy Freeman | Jun 30, 2009 6:05:50 PM

I would be all in favor of taxing Yale, even without their violations of the law. They, and other private colleges, have piled up wealth out of proportion to the social good they perform. I think they should pay taxes.

Posted by: Fat Man | Jun 30, 2009 6:55:29 PM

Gee, let's see...if you break the law, should you be subject to the penalties contained therein?
Wow, this is tough!
Maybe I'll enroll in law-school to find the answer.

Posted by: AD | Jun 30, 2009 9:22:49 PM

The more equitable response is for Congress to impose a ROTC requirement on law schools.

Posted by: Michael Kochin | Jul 1, 2009 7:10:04 AM