Paul L. Caron

Sunday, July 5, 2015

Will Christian Colleges (And Law Schools) Lose Their Tax Exemption After Obergefell?

White House Same Sex MarriageFollowing up on my previous post, Will Supreme Court's Same-Sex Marriage Decision Cost BYU Its Tax Exemption?:  Inside Higher Ed, The Supreme Court Ruling and Christian Colleges:

Friday's Supreme Court decision that states must authorize and recognize gay and lesbian marriages could create major legal challenges for religious colleges -- primarily evangelical Christian colleges that bar same-sex relationships among students and faculty members. Or the decision may not create much of a legal challenge at all. Or it may create challenges, but not soon.

Legal experts are divided. But the question of whether same-sex marriage as a national right changes the legal status of Christian colleges is no longer just theoretical.

For the majority of colleges that do not bar same-sex relationships, the decision won't change very much, or may simplify things. Many colleges and universities embrace the same-sex partnerships or marriages of their students and employees, and accord them the same benefits as straight couples. In states without same-sex marriage rights, many colleges have offered or tried to offer domestic partner benefits (which some state governments by legislation or political influence have blocked at public institutions). Colleges that were not comfortable offering health insurance to employees when not all employees could get marital or family coverage no longer face that prospect, as everyone has equal marriage rights.

Not all religious colleges -- even those from faiths that oppose same-sex marriage -- may be affected by the Supreme Court's decision. The Roman Catholic Church, for example, is a vocal opponent of same-sex marriage. But Roman Catholic colleges do not bar people in same-sex relationships from enrolling or being hired. And as states have recognized same-sex marriage, many Catholic colleges, such as the University of Notre Dame, have extended health and other benefits to the gay and lesbian partners of employees. As a result of such policies, Catholic colleges are unlikely targets for those who want religious colleges to fully respect gay and lesbian marriages.

But that is not the case for many Christian evangelical colleges, the vast majority of which bar students and faculty members from having gay or lesbian relationships.

And those colleges, some legal experts believe, may now face challenges to their tax-exempt status or other government benefits. "Private institutions that dissent from today's reformulation of marriage must be prepared for aggressive legal attacks on all fronts," said Michael W. McConnell, the Richard and Frances Mallery Professor and director of the Constitutional Law Center at Stanford University Law School.

The Internal Revenue Service grants tax-exempt and charitable status to colleges and other nonprofit organizations with a range of views on many issues, including issues of faith. Generally, there is a high bar for the IRS to deny such status to a nonprofit college, but a precedent involving Bob Jones University illustrates to some legal observers how Christian colleges' tax status could be challenged now.

In 1970, the Internal Revenue Service adopted a policy that it would not grant tax-exempt status to private schools and colleges that engaged in racial discrimination, saying that as a matter of public policy, such groups could not be viewed as "charitable." That ruling led to a series of disputes with Bob Jones University, which barred the admission of any applicants in an interracial marriage or dating relationship, or who advocated interracial marriage. (Single black students who did not date or marry anyone who was not black were permitted to enroll.) The IRS found these policies to be racially discriminatory and revoked the tax-exempt status of the university.

Bob Jones sued on the grounds that its policies were based on its religious views, and thus should be protected. But in 1982, the U.S. Supreme Court ruled that the IRS was within its rights. ...

The view that the Supreme Court's decision could result in challenges to Christian colleges' tax exemptions extends to critics of their policies.

Michael A. Olivas, director of the Institute for Higher Education Law and Governance at the University of Houston and author of The Law and Higher Education, said that the Supreme Court ruling should prompt Christian colleges to rethink their policies. "In an area of social change that is as well defined as this issue is, why would any college want to violate the law by banning relationships that are not only legal, but if they led to marriage would be legal and recognizable in every jurisdiction in the country?" he asked

Olivas said that this issue will likely play out as the Bob Jones case did. The policies Bob Jones defended were once reflected by public policy, and so are the policies Christian colleges are defending. But public policy changed in both instances, he said.

"It is one thing to premise behavior bans on what was illegal at one time," he said, noting that Bob Jones's policies against interracial dating were once consistent with South Carolina law. "But if you liken this historical period to that one, it is clear that public policy has changed with regard to the underlying illegality or inability to effectuate a marriage as same sex. That is no longer a shield," he said.

Olivas said he could see a "small" exemption for seminaries that train clergy, but not for most Christian colleges that train undergraduates and students for a variety of careers other than becoming a member of the clergy. For most religious institutions, he said, they would need to renounce tax exemptions to maintain their policies. "They can't have it both ways," he said. ...

Rod Smolla, who starts this week as the dean of Widener University Delaware Law School and is the author of The Constitution Goes to College, said he could see legal challenges for Christian colleges, but that the process would be a long one and they may have protections that were not available to Bob Jones, he said.

Smolla noted that nothing would happen quickly, as the IRS would need to adopt a policy about colleges that don't treat gay people equally and state tax agencies would have to do the same. That is "a policy and political decision," he said, adding that it is "difficult to know whether government agencies would take that step, or just leave nonprofits alone on this issue, at least in the near future."

Then, if the IRS did so, and challenged tax exemptions, Smolla said that litigation would likely result. In that litigation, he said, Christian colleges would likely cite the Religious Freedom Restoration Act (a federal law that many states have versions of, designed to prevent government actions that would force religious people or organizations to violate their beliefs). That law was enacted in 1993, so it was not something Bob Jones could cite. Smolla said that cases involving the act "have been extremely close," so it's hard to predict if it would shift courts away from the precedent involving Bob Jones.

As a result of all of these factors, he said, government is likely to "go slow" in questioning Christian colleges' tax-exempt status.

Olivas of the University of Houston acknowledged this possibility, but predicted that the issue will eventually be addressed. "There is a tension, to be sure, if colleges try and carve out such enclaves and evade their obligations, such as has been happening with some religious colleges that do not want to implement" the new health care law. "The administration has treated them gingerly, but at some point, the outlier colleges will not accommodate or yield. Then, the cases will carve out a common law. But this is dangerous ground, and they will have to act carefully. If it is a clash, it will have to be addressed by the courts."

Trinity WesternCanadian Lawyer Magazine, Ontario Court Upholds LSUC’s Denial of TWU Accreditation:

The Ontario Divisional Court has upheld a decision by the Law Society of Upper Canada not to accredit Trinity Western University’s planned law school.

LSUC benchers voted in April 2014 not to accredit the law school proposed by TWU, a British Columbia-based evangelical Christian university, because of its community covenant that asks students to refrain from “sexual intimacy that violates the sacredness of marriage between a man and a woman,” a stipulation critics argue is discriminatory against LGBTQ individuals. But the university appealed to Divisional Court for a judicial review of the law society’s decision.

The three-person Divisional Court panel, however, agreed that TWU’s policy was discriminatory. ...

To attend the law school, TWU students “must sign a document in which they agree to essentially bury a crucial component of their very identity” since “it is accepted that sexual conduct is an integral part of a person’s very identity,” it says.

But the LSUC’s decision not to accredit TWU’s law school has less of an impact on religious rights than it does on the university’s ability to make money, the judges ruled.

Refusing accreditation to the school, the decision states, “does not, in fact, preclude TWU from opening a law school,” despite TWU’s argument that it would not open the school without accreditation from LSUC, and “while . . . there is a degree of interference with religious beliefs, should that result occur . . . the motivating force not to open the law school appears to be more economic than it is religious.

“What TWU would then be essentially saying is that it not only wishes to operate its law school in a particular way in order to advance its religious beliefs, but that it will only do so if it is guaranteed access to the single largest market for law school graduates.” ...

In a news release, TWU said it planned to appeal the decision as soon as possible. “The Court’s finding that there has been a breach of religious freedom rights in this case is critically important,” said TWU spokesman Guy Saffold. “The court’s ultimate decision against TWU is starkly at odds with the Supreme Court of Canada’s 2001 decision directing approval of TWU’s teacher education program. It points a knife at the freedom of faith communities across Canada to hold and practise their beliefs.”

Prior TaxProf Blog coverage:

Legal Education, New Cases | Permalink


Due Process applies to persons. Persons are sons and daughters. To identify our sons and daughters according to sexual desire/inclination/orientation, sexually objectifies the human person, and is thus a violation of our inherent Liberty.

Posted by: N.D. | Jul 13, 2015 9:52:23 AM

Something to think about in the days to come:

But whatever the wisdom or folly of §1519, this Court does not get to rewrite the law. “Resolution of the pros and cons of whether a statute should sweep broadly or narrowly is for Congress.” Rodgers, 466 U. S., at 484. If judges disagree with Congress’s choice, we are perfectly entitled to say so—in lectures, in law review articles, and even in dicta. But we are not entitled to replace the stat- ute Congress enacted with an alternative of our own design.

"But whatever the wisdom or folly of §1519, this Court does not get to rewrite the law. “Resolution of the pros and cons of whether a statute should sweep broadly or narrowly is for Congress.” Rodgers, 466 U. S., at 484. If judges disagree with Congress’s choice, we are perfectly entitled to say so—in lectures, in law review articles, and even in dicta. But we are not entitled to replace the stat- ute Congress enacted with an alternative of our own design."

Posted by: N.D. | Jul 11, 2015 10:04:25 AM

Religious zealotry is a vague term. Our Dignity comes from having been created for communion with God, Who Is Love. In worshipping God, we profess that God Is The Author of Love, Life, and Marriage.
He Is Risen!

Posted by: N.D. | Jul 8, 2015 11:08:57 AM

I see words typed by N.D. but it reads like gibberish. Can anyone translate religious zealotry to english, please?

Posted by: Daniel | Jul 8, 2015 8:55:00 AM

What is missing in regards to The Dignity Clause, is an explanation as to how same-sex sexual acts respect the inherent personal and relational Dignity of the human person as a son or daughter, and how the desire to engage in certain acts could change the inheret essence of an act. The Truth of Love serves for the Good of all persons, for all persons have the inherent Right to be treated with Dignity and respect in private as well as in public.

Posted by: N.D. | Jul 7, 2015 1:28:28 PM

I have written about Trinity Western University from a Canadian tax and charity law perspective.

What most debates about same-sex marriage are missing is that there is no agreement about what it means to be male or female. The insistence on dividing human beings into only those two (supposedly immutable) categories is extremely damaging to trans and intersex people. For more information on the intersex population – people who were truly “born that way” as somewhere on a spectrum of biological sex – see the Intersex Society of North America’s website.

Posted by: Saul Templeton | Jul 7, 2015 6:21:34 AM

mike livingston don't be sure about that. The Bob Jones case was decided on public policy grounds and discrimination in education. As long as Kennedy is on the Court, all bets are off dude.

Posted by: anon | Jul 6, 2015 2:47:28 PM

I'll be very surprised if we don't see multiple lawsuits by the end of this year against churches that refuse to conduct gay weddings. It'll take a while, but within 5 years or so, I expect the supreme court to rule that any church that doesn't conduct same sex weddings can be denied tax exempt status. OK, it might take longer than 5 years but I fully expect this to happen. The Constitution only means what 5 or more supreme court justices say it means at any given time on any given issue.

Posted by: Larry J | Jul 6, 2015 8:48:48 AM

It is neither necessary, nor is it proper, for any Judge, State or Federal, to remove the necessary requirement for a marriage contract, which is the ability and desire to exist in relationship as husband and wife, thus participating in the act of the promotion of both marriage fraud and the sin of adultery.!/articles/1/essays/11/impeachment

Posted by: N.D. | Jul 6, 2015 7:09:12 AM

Existing in relationship as husband and wife does not depend on someone's ancestry, as every someone, son or daughter, is a member of The Human Race.

Posted by: N.D. | Jul 6, 2015 5:38:15 AM

I think all colleges and institutions should be concerned. If christian colleges loose their status, its only a short step for folks to ask why other colleges still have theirs. Based on the current state of our countries finances, I see a lot of 'tax exempt' organizations losing their status.

Posted by: kevin drevik | Jul 6, 2015 4:36:16 AM

Existing in relationship as husband and wife, does not depend on Race/Ancestry, thus it is unjust discrimination to discriminate against a husband or wife based on Race/Ancestry. It is not unjust discrimination that only a man can be a son, brother, husband and father, and only a woman can be a daughter, sister, wife, mother.
Now that The Supreme Court has removed the necessary requirement for marriage in order to accommodate persons who do not have the ability and desire to exist in relationship as husband and wife, any Loving relationship can be redefined as a marriage, as what separated marriage from every other form of Loving relationship, was the ability and desire to exist in relationship as husband and wife.
How can one lose their tax exemption for recognizing the self -evident truth, that, regardless of a Race/Ancestry, only a man and woman can exist in relationship as husband and wife?

Posted by: N.D. | Jul 5, 2015 8:18:05 PM

I wouldn't hold my breath. It was a big fight to decide Bob Jones, and the policy against racism is much stronger than that in favor of gay rights, which really don't exist outside of the right to marry. It's possible but it's a long way off.

Posted by: mike livingston | Jul 5, 2015 3:07:26 PM

Not everything that is legal is respectful of the inherent Dignity of the human person. The question is, why should anyone lose their tax exemption for desiring to discriminate between appropriate and inappropriate behavior?

Posted by: N.D. | Jul 5, 2015 2:28:56 PM