charitable purposes comprise, in general, organizations for the

relief of the poor." 11/

The Revenue Act of 1934, ch. 216, $ 101(6), 48 Stat.

680, carried forward unchanged the exemption provision of prior revenue acts, but added the requirement that no substantial part of the activities of an exempt organization could involve the "carrying on of propaganda" or "attempting to influence legislation." Once again, the addition of this requirement would have been unnecessary if Congress had intended for all organizations to qualify as common law charities in order to be exempt from taxation. See 4A Scott, The Law of Trusts $ 374.6 (2d ed. 1956).

The Revenue Act of 1936, ch. 740, $ 101 (6), 49 Stat. 1648, and the Revenue Act of 1938, ch. 554, § 101(6), 52 Stat. 447, also carried forward the same exemption, and the regulations promulgated under these Acts continued to define the term "charitable" as "relief of the poor." See Treas. Reg. 86,

Art. 101(6)-1 (Revenue Act of 1934); Treas. Reg. 94, Art. 101(6)-1 (Revenue Act of 1936); Treas. Reg. 101, Art. 101 (6)-1 (Revenue Act of 1938).

11/ Treas. Reg. 69, Art. 517 (Revenue Act of 1926); Treas. Reg. 74, Art. 527 (Revenue Act of 1928); Treas. Reg. 77, Art. 527 (Revenue Act of 1932).

In the Internal Revenue Code of 1939, ch. 1, 53 Stat. 1 ("1939 Code"), Congress exempted from taxation the identical categories of organizations that had been exempt from taxation under the Revenue Acts of 1934, 1936 and 1938. During the fifteen years in which the 1939 Code remained in effect, the IRS issued three sets of regulations, each of which defined the term "charitable" to mean relief of poverty. See Treas.

Reg. 103, $19.101 (6)-1 (1939 Code); Treas. Reg. 111, $29.101 (6)-1 (1939 Code); Treas. Reg. 118, $39.101 (6)-1(b) (1939

Code). 12/

Section 501(c)(3) of the 1954 Code, ch. 591, 68A Stat. 163, continued to exempt the same categories of organizations that had been exempt from taxation under the 1939 Code, and added to the list of exempt entities those organizations which are organized and operated for the purpose of "testing for public safety."

12/ The House Report to the 1939 Act explained that the theory for granting tax exemptions by Congress to charitable and other qualifying organizations was in recognition of their performance of functions that promote the general welfare and that might otherwise be paid by the government. Contrary to the Fourth Circuit's suggestion in Bob Jones University, supra, 639 F.2d at 151, the Report does not indicate that Congress intended to endow the IRS with authority to disqualify a designated organization from tax-exempt status upon an agency determination that one or more of the organization's practices affronted an IRS concept of federal public policy as informed by the "general welfare." To the contrary, Congress made a determination that organizations within the terms of Section 501(c)(3) advanced the general welfare, and did not give the IRS authority to determine on a case-by-case basis whether particular practices of a qualifying organization sufficiently subtracted from the general welfare to warrant denial of a tax exemption.

25

In addition, Congress tightened the restrictions on political

activities of tax-exempt organizations. 13/

The Report of the House Ways and Means Committee on the 1954 Code stated that Section 501 "is derived from Sections 101 and 421 of the 1939 Code. No change in substance has been made except that employees' pension trusts, etc., are brought in the scope of this section." H.R. Rep. No. 1337, 83d Cong., 2d Sess. A165 (1954) (emphasis supplied).

Not until 1959 did the Internal Revenue Service broaden its interpretation of "charitable" beyond merely "relief of the poor." In Section 1.501(c)(3)−1(d)(2) of its 1959 regulations, the Service concluded:

The term "charitable" is used in Section 501
(c)(3) in its generally accepted legal sense
and is, therefore, not to be construed as
limited by the separate enumeration in Section
501(c)(3) of other tax-exempt purposes which
may fall within the broad outlines of "charity"
as developed by judicial decisions. Such term
includes: Relief of the poor and distressed or
of the underprivileged; advancement of religion;
advancement of education or science; erection or
maintenance of public buildings, monuments, or
works; lessening of the burdens of Government;
and promotion of social welfare by organizations
designed to accomplish any of the above purposes,
or (i) to lessen neighborhood tensions; (ii) to
eliminate prejudice and discrimination; (iii) to
defend human and civil rights secured by law; or
(iv) to combat community deterioration and
juvenile delinquency.

13/ The 1954 Code does not permit tax-exempt organizations to "participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office."

Obviously, the purpose of this regulation is to clarify that the meaning of "charitable" is not "limited by the separate

enumeration in Section 501(c)(3) of other tax-exempt purposes";
for to so limit the term would render it redundant in the statute.
The regulation does not suggest organizations devoted to other
purposes enumerated in Section 501(c)(3), such as "educational"
and "religious" purposes, must also serve "charitable" purposes.
Indeed, the same regulation defines "educational" without any
reference to the notion of charity:

The term "educational", as used in Section 501(c)(3),
relates to

(a) The instruction or training of the individual
for the purpose of improving or developing his
capabilities; or

(b) The instruction of the public on subjects
useful to the individual and beneficial to the
community.

26 C.F.R. $ 1.501(c)(3)−1(d)(3) (1959). 14/

14/ To the extent that the Service's regulations can be interpreted to require "educational" organizations to also satisfy the requirements of "charitable" organizations, they are inconsistent with the plain language of Section 501(c)(3) and are suspect. The Supreme Court outlined the limits of the Executive's interpretive powers in Manhattan General Equipment Company v. Commissioner, 297 U.S. 129, 130 (1935):

The power of an administrative officer or board
to administer a federal statute and to prescribe
rules and regulations to that end is not the power
to make law--for no such power can be delegated by
Congress--but the power to adopt regulations to
carry into effect the will of Congress as expressed
by the statute. A regulation which does not do
this, but operates to create a rule out of harmony
with the statute, is a mere nullity.

Under the Service's interpretive regulations, private schools plainly qualify as "educational" institutions entitled to taxexempt status under Section 501(c)(3), notwithstanding any racially discriminatory practices.

Since 1894, Congress has consistently and repeatedly manifested an intent to exempt from income taxation corporations organized for purely "educational" purposes, as well as corporations organized for purely "charitable" purposes. The action of Congress is inconsistent with an intent to deny tax-exempt status to an otherwise qualified "educational" organization simply because it does not also qualify as a common law "charitable"

organization.

Significantly, the Commissioner of Internal Revenue did not read Section 501(c)(3) and its predecessors any differently until 1970--some 70 years after Congress' initial enactment of the relevant statutory language. To the contrary, prior to its sudden reversal of position in the middle of the Green litigation, the government had steadfastly maintained the position demanded by the unambiguous language of Section 501(c)(3), its legislative history, and the Service's own interpretative regulations. So belated an administrative reversal of position provides no legal basis for ascribing to a much earlier Congress an intent at odds with the very words used by Congress. 15/ Here, the original legislative intent

15/ Obviously, the Commissioner's 1970 revenue ruling is not even arguably a contemporaneous construction of the statute by those presumed to be aware of congressional intent National Muffler Dealers Assn. v. United States, 440 U.S. 472, 477 (1979).