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P. O. Box 737, Atlanta, Georgia 30301

Oct. 19, 1971 In reply refer to:



Lamar School Foundation

3300 32nd Avenue

Meridian, Mississippi 39301

ollowing the decree of the United States District Court for the District of Columbia in Greed v. Connally, Civil Action No. 1335-69. June 30, 1971, we advised you in letter dated August 21, 1971. that the Court had dered that every private school in the state of Misssippi must make a showing of a racially nondiscrimiatory policy as to students and submit certain specified information to the Internal Revenue Service in order to retain recognition as exempt from Federal income tax. The Court further ordered that unless such showing was made within ninety days of the date of the Order, or within not more than an additional ninety days there

er where the school showed cause for such an extenion of time, the Internal Revenue Service was enjoined from continuing to recognize the school as tax exempt. Ninety days have elapsed from the date of the Order and you have neither complied with its requirements nor shown cause for an extension of time.

Accordingly, in compliance with the Court's injunction, the ruling dated March 17. 1965, recognizing you as exempt from Federal income tax under section 501 (c) (8) of the Internal Revenue Code is revoked.


In accordance with the provisions of section 7805(b) of the Internal Revenue Code, which permits the Internal Revenue Service to limit the retroactive effect of rulings, this revocation will be applied only to periods beginning after September 23, 1970, the date on which you were advised that the Internal Revenue Service proposed to revoke recognition of your exempt status because you were not operating on a racially nondiscriminatory basis as to students. You are required to file Federal income tax returns on Form 1120 for subsequent periods. Under the specific terms of the order, contributions to you after June 26, 1970, are not deductible by the donors under section 170 e of the Internal Revenue Code.

Any questions about your Federal tax status or filing requirements should be directed to the District Director of Internal Revenue. Jackson, Mississippi.

Very truly yours,

Bob N. Marsh


Acting District Director

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(Recent Cases)

1. The United States District Court for the District of South Carolina on November 17, 1971 enjoined the Secretary of the Treasury and Commissioner of Internal Revenue from "revoking or threatening to revoke the 501(c) (3) tax exempt status of . . . a private university whose racially discriminatory admissions policy had religi ous connotations. The District Court distinguisi.ed the earlier decision in Green v. Kennedy 309 F. Supp. 1127) on the basis of the long established exemption of the plaintiff and the unavailability at that time of this Court's decision in Walz v. Tax Commission, 397 U.S. 664.


Bob Jones Univ. v. John B. Connally, Sec. of the Treas. and Johnnie M. Walters, Comm. of Int. Rev. (Civ. Act. 71-891, unreported).

2. To a contrary conclusion, the United States District Court for the Eastern District of Wisconsin, (3-judge) on October 18, 1971, held the tax exemption laws of Wisconsin to be unconstitutional under the Fourteenth Amend ment "insofar as they permit tax exemptions for or ganizations which discriminate in membership on the basis of race." In its ruling that Court adopted the reasoning of the holding here appealed from:

"Inherent in our decision and that in Green and in any distinction of Walz, Chicago Joint Board and Bright, is a determination that a different standard must be applied to ascertain state action in cases involving equal protection than in cases involving other rights. . . . Under the reasoning in Green, the grant of a tax exemption to such organizations is a significant state action encouraging discrimination in violation of the plaintiffs' rights under the equal pro tection clause of the Fourteenth Amendment and must be enjoined."

Pitts, et al., v. Wisconsin, et al., No. 69-C-260, unreported)

23 Nov. 1971.

Respectfully submitted,

Geo. S. Leonard

Leonard, Clammer & Flues
Attorneys for Appellants

STATEMENT OF the National COUNCIL OF Jewish Women, Inc., NEW YORK, N.Y.

The National Council of Jewish Women (NCJW) is deeply disturbed at the Administration's reversal of a long-standing federal public policy denying tax exempt status to private and non-profit institutions that practice racial discrimination and segregation. Throughout our 88 year history, NCJW, a volunteer organization of 100,000 members in 185 Sections across the country, has been concerned with the fundamental American priorities of individual liberties, and civil rights. We regard the recent action by the Administration as divisive and a serious threat to, and an erosion of, those rights.

When it adopted the Civil Rights Act of 1964, Congress clearly recognized the responsibility of the federal government to protect the rights of all its citizens and to ensure free access to the educational institution of their choice. In consonance with the intent of Congress, the federal courts and, ultimately the Supreme Court, have mandated the enforcement of the provisions of the Civil Rights Act by Executive Departments in such areas as tax regulation.

The public at large has been given the erroneous impression that the administration was acting on its behalf to prevent "the I.R.S. from determining national social policy all by itself." To this day, many people do not realize that the I.R.S. did not institute the practice, but was carrying out its Congressional and Court mandate to deny tax exempt status to private schools that practice racial discrimination in their admissions procedure. The I.R.S. revenue rulings were issued for public comment when first formulated and again when later revised. The procedure was open and consistent with Congressional intent to discourage racial discrimination. It is the action of the Administration, not the I.R.S., that blocks the intent of Congress and also denies the opportunity for judicial review of challenges to the I.R.S. rulings.

NCJW believes that the intent of Congress is clear in existing legislation and that tax exempt status should be denied to all private schools which practice racial discrimination.

NCJW, therefore, objects to the adoption of any further legislation which would duplicate, in essence, the Civil Rights Act of 1964. Instead, we believe that consideration of such measures by Congress encourages the Administration to avoid it responsibility to implement and carry out the will of Congress.

Statement of Maudine R. Cooper, Vice President for WASHINGTON OPERATIONS, NATIONAL URBAN LEAGUE, INC.

On behalf of the National Urban League, I am pleased to submit this testimony for the record of hearings held on the issue of the tax exempt status of private schools. The National Urban League is a non-profit, community service organization committed to securing equal opportunities and the full participation of blacks, the poor, and members of other minority groups in American life.

Our quest to achieve equal opportunity for the disadvantaged has progressed for over 70 years on a number of fronts and in a variety of arenas. Although we have not yet reached the pinnacle of a color blind society for which we strive, the last 20 years have been witness to some of the most substantial gains in our history. Through Congress, the courts, sensitive Administrations, and indeed public opinion, we have made notable strides in the areas of employment, social welfare, political participation, and relative to this case, education.

For these reasons, we are appalled that the Administration would consider withdrawing the ban on tax exemptions for institutions that practice racial discrimination or conversely, introduce legislation to "restore" the prohibition. Both actions effectively eschew a plethora of legislative action and court decisions that unequivocally deny this privilege to those that attempt to circumvent the law. We have been asked to take a quantum leap backward, and repeat or even rewrite past history. We cannot accept this selective reading of applicable law, but must ask members of the Committee to look at the record. The inescapable conclusion, we are sure, will be that the three branches of government have already addressed this issue, and further legislation would be at best superfluous, at worst, a signal to the country that this Administration is ignoring the letter and the spirit of the law.

Tax exempt status is a privilege granted by the Federal government, not a right to be enjoyed by any organization claiming to be charitable while flagrantly ignoring the law. Designation as a 501(c)(3) agency is justified by the belief that the government is compensated for the loss of the institution's tax revenue by the benefits which accrue from the group's promotion of the general welfare. Clearly, any school or organization that practices racial discrimination is not working for the general

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