Marie Sapirie has a new piece on the regs in Tax Notes, “Evaluating the Proposed Nondiscrimination Regs Under Bob Jones” (Sept. 28, 2026):

The writing has been on the wall — or rather on Truth Social — for some time, but the IRS and Treasury finally released proposed regulations (REG-119986-25) on racial nondiscrimination in private schools. The proposed regs, issued on September 4, put at risk the tax exemption of private K-12 schools that are found to have policies or programs that violate the nondiscrimination rule. Treasury Secretary Scott Bessent called the proposed rules “a clear standard” that would discourage schools from “rebranding race-based preferences as equitable, inclusive, or diversity-enhancing.” The stage was set decades ago for a showdown between private schools and the government, when the IRS claimed broad authority to revoke organizations’ tax-exempt status on the basis of public policy.

The proposed regs are predictably broad. They reach every “educational policy, admissions policy, scholarship or loan program, athletic program, or other school-administered or school-supported program.” That language comes almost directly from Rev. Rul. 71-447, 1971-2 C.B. 230, which defined “racially nondiscriminatory policy as to students.” The only substantive difference is that the 1971 revenue ruling does not mention “school-supported” programs.