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your statement, you have given a rather thoughtful statement of the dilemma that faces the Government in going or not going forward with it.

Apparently you viewed two sides of it, as indeed there can be, that need to be dealt with. Are you a lawyer? I am not.

Mr. EGGER. Yes, I am.

Mr. MARTIN. I don't hold that against you.

Mr. EGGER. That is good. Some of my best friends are lawyers. Mr. MARTIN. Do you have any ideal reaction as to what kind of lawmakers should come here and characterize the issue as having only one side and anyone else who would disagree with them would flunk their course.

Is that how your law school was conducted?

Mr. EGGER. The obvious answer to that is that they are persuaded by case law that that is the answer.

I am persuaded that the weight of authority in the case law is in that direction. However, the biggest dilemma is not free from doubt. There are many lawyers and judges who have taken fairly sharp positions to the contrary.

Nevertheless, I felt that the easiest way to resolve it was in the

courts.

Mr. MARTIN. You would feel that if you were teaching law, that you would not flunk students just because they disagree with your conclusions about case law?

Mr. EGGER. Right.

Mr. MARTIN. We had a question of censure raised here earlier and I think that has kind of died on the vine, but do you see any basis for that from what you heard here today?

Do you have any idea why Professor Tribe would come here and pose such a thing?

Mr. EGGER. No, I do not know Professor Tribe. I heard his testimony today and I wasn't quite sure what the grounds were. Mr. MARTIN. You might call that diatribe.

Mr. CONABLE. Now come on.

Mr. MARTIN. Aside from the questions of how we got here, and aside from the questions of how we get out of here-

Mr. CONABLE. Or whether.

Mr. MARTIN. Do you support the legislation on its merits which Mr. Conable I believe has introduced on behalf of the administration as a courtesy to the administration?

Do you find it workable in the way it differentiates theological seminaries?

Mr. EGGER. I guess the first question is that my reading of that proposed legislation is that it would put us, in the case of the primary and secondary schools, in the same posture as we were prior to January 8, with respect to the issue of race discrimination.

So in that sense I do not see it as any material change. That is to say, changes in results.

Mr. MARTIN. Would it be helpful?

Mr. EGGER. Oh, yes, it certainly would be helpful to get us out of this dilemma at this point.

Mr. MARTIN. So you would support it?

Mr. EGGER. Certainly.

Mr. MARTIN. With regard to differentiation of theological seminaries, does that pose a problem as for example, a school that might go from kindergarten through theological seminary? Is that a workable

Mr. EGGER. As I understood it, the section in there with regard to admissions preference or priorities, on the basis of membership or belief in the particular religion, would still not permit discrimination on the basis of race.

Mr. MARTIN. So you think it would be a workable position.
Mr. EGGER. Yes.

Mr. MARTIN. Thank you very much.

Mr. BAILEY. Commissioner, you may have been asked this question so forgive me if I am redundant, but the relationship between you and Justice would not require you to-or would it-to follow the recommendation from them that you comply with their interpretation of law?

In short, are you going to continue denying tax exempt status? I would hope that you would, if you can.

Mr. EGGER. Mr. Bailey, the Internal Revenue Code confers the authority on the Secretary of the Treasury, to whom I report, so that the ultimate decision in a matter of that importance lies with the Secretary of the Treasury.

Now, the relationship between our agency and the Justice Department is that they are counsel to or attorneys for our agency along with other-many other-agencies in the Government. So in a sense there is no direct line. We would not necessarily be required to follow a recommendation of the Justice Department. Mr. BAILEY. That is right.

Mr. EGGER. However if the Treasury Department, as in this case, made a policy decision, then that is the final word.

Mr. BAILEY. So Secretary Regan will be giving you marching orders on whether you are going to follow what certainly has been an opinion on the part of those attorneys in Justice?

Mr. EGGER. That is correct. The Secretary of the Treasury is the authorized officer under the law, and he merely delegates certain portions to the Commissioner of the Internal Revenue.

Mr. BAILEY. Thank you, Commissioner. What is your personal reading of the law? Do you think that there was sufficient congressional intent demonstrated in existing law to indicate what our desires are?

Mr. EGGER. I have to tell you that I think the statute itself is relatively vacant of any clear indication of congressional intent. However, I believe there is adequate case law to move forward with this litigation, as I have said.

Mr. BAILEY. Adequate case law and, of course, your practice, which has been implemented for a number of years. There is also no question in your mind that the intent and purpose of the socalled Ashbrook or Dornan amendments or whatnot were due to the fact that there was a very heavy paperwork burden, a requirement to come forth on the part of schools and prove, in fact, that that was the intent of those amendments, whether they were well written or not. I think we had some testimony earlier that there were some doubts about the intent of those amendments and they didn't want you to enforce that policy.

I don't think that is true. I don't remember the debate that way. Could you help me with your memory?

Mr. EGGER. My first reaction to those amendments was that they were intended to stop the Internal Revenue Service from implementing the procedures which at least in those days were outlining the procedures for-

Mr. BAILEY. For a claimant or taxpayer to follow?

Mr. EGGER. In the determination of whether that institution did practice discrimination.

Mr. BAILEY. They were not meant to imply that you or Justice were interpreting congressional intent differently as to discrimination and the exemption procedure. And they certainly never made any attempt to deny the rights of a litigant to try to enforce or try to encourage Justice or to bring a case on their own behalf to prevent tax-exempt status for a school that did practice discrimination.

In other words, they never attempted to interfere with anyone's rights to bring an action, to deny tax exempt status to someone who discriminated as a matter of course?

Mr. EGGER. Well, I suppose the most recent version causes me some confusion, I must say, because of the limitation as to court order as well as to our own revenue procedures.

I am not sure which way is out of that dilemma, and I wish it weren't there, but other than that I think basically what you said is true.

Mr. BAILEY. You have not received an order from Secretary Regan yet in this regard?

Mr. EGGER. TO?

Mr. BAILEY. Concerning your policy in these matters?

Mr. EGGER. We certainly have been directed by the Secretary or the Deputy to go forward with the revocation of the revenue rulings and procedures which form the basis for our heretofore posi

tion.

Mr. BAILEY. You have been already?

Mr. EGGER. Certainly.

Mr. BAILEY. You have?

Chairman ROSTENKOWSKI. Mr. Anthony will inquire.
Mr. ANTHONY. Thank you, Mr. Chairman.

Commissioner, I would like to follow up on that. How long will it take the IRS to comply with the Secretary of the Treasury's mandate to withdraw those regulations and in fact grant the tax exemption to Bob Jones University and Goldsboro Christian Schools? Mr. EGGER. In the case of the exemptions, the cases are rather old. In the case of Bob Jones, the last tax year that is involved in the court proceeding is 1975. It would be necessary for us in any case-and this would be true whether it was in this instance or in another case where a court had reversed our finding-it would be necessary for us to proceed to look at the interim period to make certain that the institution qualified in other respects. So it will take some time, including possibly obtaining some information from the institutions and so on. So there is a normal natural procedural period here. I cannot give you specifics on it.

Mr. ANTHONY. What would be a rough estimation?

Mr. EGGER. I do not know. Possibly some weeks, maybe even a month or so. It is hard to say.

Mr. ANTHONY. Some weeks, maybe a month?

Mr. GIDEON. That would also depend on the institution's response to some of the requests for information.

Mr. EGGER. Right.

Mr. GIDEON. In other words, that is procedural. It would happen in due course.

Mr. ANTHONY. Since the decision has been made and you have already been-I think that was January 8-—

Mr. GIDEON. Right.

Mr. ANTHONY. That you got that instruction. I understand that Justice has filed a lawsuit for you claiming back tax that Bob Jones University has failed to pay. I understand they just paid a minimum amount so they could get a standing to sue in court, and that you now have a suit going claiming back taxes.

Mr. GIDEON. That is the same lawsuit. In other words, when Bob Jones filed its suit, we filed a counterclaim.

Mr. ANTHONY. You counterclaimed, so it is all tied up in the same suit.

Mr. GIDEON. The same suit in both cases, Bob Jones and Goldsboro.

Mr. ANTHONY. So when that case is eventually disposed of, that particular part of your counterclaim would be disposed of at the same time?

Mr. GIDEON. That is correct.

Mr. ANTHONY. It would be handled together?

Mr. GIDEON. Right.

Mr. ANTHONY. Thank you. I yield back the balance of my time. Chairman ROSTENKOWSKI. Mr. Commissioner, thank you very much for joining us. I want to thank the members of the committee for their deliberations. I also want to make some observations as we close.

Much of the testimony given today certainly troubles quite a few of us on the committee. Personally, I am struck by the carelessness or the naivete with which the administration reversed longstanding civil rights law.

Clearly, they chose to ignore a substantial body of law that has guided Federal policy against discrimination under both Democratic and Republican administrations over the past 12 years.

Testimony today raises fundamental doubts concerning this administration's intent on executing laws developed by Congress and the courts. The law of the land is not erased when administrations change. The law-in this case, the law against racial discrimination in private schools-transcends political changes in Washington. The executive branch cannot ignore the body of law developed by the Congress and legal precedents established by the judiciary. Only the Supreme Court can overturn the decisions of other courts, and only the Congress can change the statutes which reflect earlier policy decisions.

I think the majority of members on this committee find it hard to believe the decision which confronts such a fundamental legal and moral standard in this country was reached over a period of 3 weeks, and based on an after-the-fact legal analysis of such dubious

scholarship. We have no evidence that a legal case for the decision was made before January 5, the same day a memorandum reveals the public relations strategy for releasing the policy change so as to escape early criticism in the media.

Nor is there evidence that the administration's case was in any way shaped by attorneys in the Tax Division of the Justice Department or the Treasury Department, or even in the Civil Rights Division of the Justice Department, all traditional sources of legal judgment within every administration. Instead, the legal justification for ignoring years of antidiscrimination rulings all the way to the Supreme Court was prepared by special assistants to the Attorney General and Assistant Attorney General for Civil Rights. Indeed, they reflect a very selective memory regarding various legal precedents and legislative history over the last 12 years.

Existing law as enacted by the Congress and as interpreted by the courts is very clear. It denies tax exemptions to private schools that practice racial discrimination. Many of us then are unconvinced as to why this administration is asking for additional legislation and "clear" statutory authority.

The testimony presented to this committee today by the panel of legal scholars compels us to find no justification for the position of the administration that additional legislation is necessary.

I strongly urge the administration to review the existing body of law-to withdraw its position on this issue-and to conclude that the law is clear and must be faithfully executed. Of equal importance, the administration must take the action necessary to let the Supreme Court hear the cases of Bob Jones University and Goldsboro on the merits.

Mr. CONABLE. Mr. Chairman, I do not quarrel with the conclusion you come to here. Is this an announcement that there will be no markup?

Chairman ROSTENKOWSKI. No. The Chair will decide what further steps we will take. I think the Chair is going to wait for some reaction from the administration.

Mr. CONABLE. I see. You feel that on the basis of this hearing then the answer is that the Congress has no interest in legislating in this area?

Chairman ROSTENKOWSKI. I think the Chair will react to whatever the administration wants to discuss with him in the near future.

Mr. CONABLE. I thank the gentleman for clarifying that.
[Whereupon, at 6:25 p.m., the hearing was adjourned.]
[The following was submitted for the record:]

STATEMENT OF HON. GARY HART, A U.S. SENATOR FROM THE STATE OF COLORADO Mr. Chairman, I appreciate the opportunity to submit a statement for the record as you begin your hearing on the issue of tax-exempt status for private schools that practice racial discrimination.

The Administration's confusing policy reversals on this issue over the last few weeks have been unfortunate and unnecessary. They represent an insensitivity not only to the law and progress made on civil rights in the last quarter century but more important, an insensitivity to the fundamental moral values which have been the foundation for such progress. The new statute which President Reagan has now proposed only adds further to the unnecessary confusion.

Current Federal law is clear. As the U.S. Commission on Civil Rights has pointed out, the Constitution, Title IV of the Civil Rights Act, and the Internal Revenue

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