Ellen P. Aprill (Loyola-L.A.; Google Scholar), Brian Galle (Georgetown, moving to UC-Berkeley; Google Scholar), Philip Hackney (Pittsburgh; Google Scholar) & Lloyd Hitoshi Mayer (Notre Dame; Google Scholar), Harvard Does Have Options if It Loses Tax-Exempt Status, 187 Tax Notes Fed. 1519 (May 26, 2025):

As scholars of nonprofit, tax-exempt organizations, we wish to take issue with Marie Sapirie’s recent article, “Harvard Has a Precedent Problem in Fight to Keep Exempt Status.” We admire and learned from her history of Bob Jones University. However, we disagree with her characterization of both the case and the avenues for judicial review available to organizations facing revocation of exemption.

Unlike Sapirie, we do not read Bob Jones University as authorizing the IRS to determine fundamental public policy and then revoke exemption on the basis of its determination. Instead, it permitted the IRS to make decisions regarding exemption that reflect fundamental public policy, as demonstrated by actions of all three branches of government. The court did not defer to the IRS. It decided for itself the major question of whether racial discrimination in education constituted a violation of fundamental public policy. It concluded that the IRS rulings in the case were consistent with fundamental public policy, already firmly established independently of it by all three branches of government.

Sapirie instead relies on revenue rulings from the ‘70s applying a standard different from that announced years later in Bob Jones. We take the position that standards announced in a Supreme Court opinion override revenue rulings to the extent they apply a different standard, much as a new statutory provision supersedes existing regulations inconsistent with the new statute.

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