INDEX TO DOCUMENTS RECEIVED FROM Agencies Dated DEC. 7, 1981, N P Q R S T U V W 12/31/81 Lawrence Wallace, Acting Solicitor General, requests 1/4/82 Memo to Schmults, Deputy AG, from John Murray, 1/4/82 Memo to John Murray, Deputy Assistant AG Tax, from 1/4/82 Commissioner Egger meets with Chapoton, Treasury As- Attachment-41 page legal brief on new policy. Pre- 1/5/82 Memo to Deputy Secretary McNamar, Treasury, from ry. 1/7/82 Letter to William Bradford Reynolds, Assistant AG Civil 1/8/82 Memo to AG and Deputy AG from Theodore Olson, X 1/8/82 Memo to Commissioner Egger from McNamar directing 692 Draft of motion to Supreme Court on Bob Jones confess- 693 Treasury Press Release announcing new policy Motion 607 609 618 1/12/82 President announces intention to introduce legislation 620 621 1/29/82 DOJ "Analysis of Legal Authorities for possible inclu- IRS teletype to field offices suspending action on cases 622 623 627 The purpose of this meeting is to alert you to the legal doctrines that the Tax Division and the Solicitor General currently intend to champion in the above-captioned Supreme Court litigation to determine whether they may be inconsistent with the litigating policies recently elucidated by the Attorney General and yourself. If you believe that there is a discrepancy, you may find it expedient to suggest a legal approach different from the one currently endorsed by the Tax Division. The controlling issue in Bob Jones and Goldsboro is whether Congress intended $170 of the Internal Revenue Code to exclude private schools from eligibility for tax exempt status if they practice racial discrimination. An affirmative answer was given by a three judge district court in 1970 and the U. S. Supreme Court summarily affirmed. The Supreme Court has explained that summary affirmances have little doctrinal value. Briefly stated, the legal rationale advocated by the Tax Division to justify denial of tax exempt status to private schools practicing racial discrimination is as follows: 1. Congress intended in enacting $170 some sixty years ago H J INDE 2. 3. Although $170 was passed when both public and private The Tax Division claims that the federal judiciary in these In support of the Tax Division's views, it should be noted that On the other hand, the legal theory advanced by the Tax Division seems to conflict with the Attorney General's view that the Department should discourage rather than encourage judicial activism and policymaking, except when clearly mandated by statute or the Constitution. The Attorney General has stated, as you know, that the Department would not deviate from its litigating policies simply to obtain an advantage in a particular case. There is a convincing argument against interpreting $170 to exclude private schools practicing racial discrimination: 1. The statute was enacted during an era rampant with 2. 3. No substantial constitutional question would be encounter. The consequences of accepting the Tax Division's women, and other groups currently favored in federal statutes on the ground that a tax exemption would be inconsistent with national policy. This exercise of judicial power would represent a sharp deviation from traditional congressional resistence to regulating comprehensively the affairs of nonprofit and other small entities. The briefs in the Supreme Court are scheduled for filing in approximately one week, although it might be possible to obtain an extension. If you believe at the conclusion of the meeting that there is any merit to altering the Department's litigating position, then further consultation with the Attorney General and our client agency in the matter, the Internal Revenue Service, would be necessary. |