Fn Fn Briefs of amici curiae urging reversal in No. But this mode of expounding a statute has never been adopted by any enlightened tribunal - because it is evident that in many cases it would defeat the object which the Legislature intended to accomplish. 11 The form of 170 simply makes plain what common sense and history tell us: in enacting both 170 and 501(c)(3), Congress sought to provide tax benefits to charitable organizations, to encourage the development of private institutions that serve a useful public purpose or supplement or take the place of public institutions of the same kind. It is a well-established canon of statutory construction that a court should go beyond the literal language of a statute if reliance on that language would defeat the plain purpose of the statute: "The general words used in the clause . ., taken by themselves, and literally construed, without regard to the object in view, would seem to sanction the claim of the plaintiff. 10 In 170, Congress used the list of organizations in defining the term "charitable contributions." On its face, therefore, 170 reveals that Congress' intention was to provide tax benefits to organizations serving charitable purposes. to public charitable uses, provided the same is consistent with local laws and public policy.
Moore for the United Church of Christ; and by Lawrence E. Briefs of amici curiae in both cases were filed by Martin B. 2 On January 12, 1970, a three-judge District Court for the District of Columbia issued a preliminary injunction prohibiting the IRS from according tax-exempt status to private schools in Mississippi that discriminated as to admissions on the basis of race. Goldsboro paid the IRS ,459.93 in withholding, social security, and unemployment taxes with respect to one employee for the years 1969 through 1972. Because of this admissions policy, the IRS revoked the University's tax-exempt status. Section 501(c)(3) of the Internal Revenue Code of 1954 (IRC) provides that "[c]orporations . But in 1970, the IRS concluded that it could no longer justify allowing tax-exempt status under 501(c)(3) to private schools that practiced racial discrimination, and in 1971 issued Revenue Ruling 71-447 providing that a private school not having a racially nondiscriminatory policy as to students is not "charitable" within the common-law concepts reflected in 170 and 501(c)(3). 81-3, petitioner Bob Jones University, while permitting unmarried Negroes to enroll as students, denies admission to applicants engaged in an interracial marriage or known to advocate interracial marriage or dating. William Bentley Ball argued the cause for petitioner in No. The origins of such exemptions lie in the special privileges that have long been extended to charitable trusts. And it is well settled that, in interpreting a statute, the court will not look merely to a particular clause in which general words may be used, but will take in connection with it the whole statute . Tax exemptions for certain institutions thought beneficial to the social order of the country as a whole, or to a particular community, are deeply rooted in our history, as in that of England. At the same time, the IRS announced that it could not "treat gifts to such schools as charitable deductions for income tax purposes [under 170]." Ibid. Following the decision of the United States Court of Appeals for the Fourth Circuit in Mc Crary v. Since May 29, 1975, the University has permitted unmarried Negroes to enroll; but a disciplinary rule prohibits interracial dating and marriage. 725 (1974), in which this Court held that the Anti-Injunction Act of the Internal Revenue Code, 26 U. Thereafter, on April 16, 1975, the IRS notified the University of the proposed revocation of its tax-exempt status. What little floor debate occurred on the charitable exemption provision of the 1894 Act and similar sections of later statutes leaves no doubt that Congress deemed the specified organizations entitled to tax benefits because they served desirable public purposes. Prior to 1954, public education in many places still was conducted under the pall of Plessy v. From 1971 to May 1975, the University accepted no applications from unmarried Negroes, 5 but did accept applications from Negroes married within their race. 160 (1976), prohibiting racial exclusion from private schools, the University revised its policy. 7421(a), prohibited the University from obtaining judicial review by way of injunctive action before the assessment or collection of any tax. These statements clearly reveal the legal background against which Congress enacted the first charitable exemption statute in 1894: 14 charities were to be given preferential treatment because they provide a benefit to society. But there can no longer be any doubt that racial discrimination in education violates deeply and widely accepted views of elementary justice. 537 (1896); racial segregation in primary and secondary education prevailed in many parts of the country. g., Segregation and the Fourteenth Amendment in the States (B. Montgomery for the National Association of Evangelicals; and by Congressman Trent Lott, pro se. Inman for the International Human Rights Law Group; by Robert H. The Court of Appeals for the Fourth Circuit affirmed, 644 F.2d 879 (1981) (per curiam). organized and operated exclusively for religious, charitable . Petitioners argue that the plain language of the statute guarantees them tax-exempt status. This "charitable" concept appears explicitly in 170 of the Code. Ellis for the Center for Law and Religious Freedom of the Christian Legal Society; by Forest D. Raim for the Anti-Defamation League of B'nai B'rith; by John H. Lake, and Adam Yarmolinsky for Independent Sector; by Amy Young-Anawaty, David Carliner, Burt Neuborne, and Harry A. Accordingly, the court entered summary judgment for the IRS on its counterclaim. or educational purposes" are entitled to tax exemption. Such an examination reveals unmistakable evidence that, underlying all relevant parts of the Code, is the intent that entitlement to tax exemption depends on meeting certain common-law standards of charity - namely, that an institution seeking tax-exempt status must serve a public purpose and not be contrary to established public policy. "A charitable use, where neither law nor public policy forbids, may be applied to almost any thing that tends to promote the well-doing and well-being of social man." Ould v. The revised policy on discrimination was formalized in Revenue Ruling 71-447, 1971-2 Cum. 230: "Both the courts and the Internal Revenue Service have long recognized that the statutory requirement of being `organized and operated exclusively for religious, charitable, . To effectuate these views, Negroes were completely excluded until 1971. 585-586 "Evidently the exemption is made in recognition of the benefit which the public derives from corporate activities of the class named, and is intended to aid them when not conducted for private gain." Trinidad v. We are bound to approach these questions with full awareness that determinations of public benefit and public policy are sensitive matters with serious implications for the institutions affected; a declaration that a given institution is not "charitable" should be made only where there can be no doubt that the activity involved is contrary to a fundamental public policy. The court permanently enjoined the Commissioner of Internal Revenue from approving tax-exempt status for any school in Mississippi that did not publicly maintain a policy of nondiscrimination. or educational purposes' was intended to express the basic common law concept [of `charity']. The sponsors of the University genuinely believe that the Bible forbids interracial dating and marriage. 19 The institution's purpose must not be so at odds with the common community conscience as to undermine any public benefit that might otherwise be conferred.