The IRS Pins ‘Badge of Doubt’ on Tax-Exempt Private Schools

One of the biggest church-and-state battles in years is shaping up in the nation’s capital. At issue is a proposed multi-part “procedure” drawn up by the Internal Revenue Service (IRS) to test whether tax-exempt private schools, especially elementary and secondary ones, are operating in a racially nondiscriminatory way. Schools failing the test would lose their tax exemptions, and donors could not claim tax deductions for gifts to the schools.

At present, the IRS simply requires tax-exempt schools to adopt a written policy of nondiscrimination, to publish it annually, and to keep minimal records. Critics both inside and outside of government, however, have argued that for some schools the policy exists only on paper, and that the IRS therefore needs tougher guidelines.

Under the proposed procedure, the IRS would assume that a “badge of doubt” rests upon any school founded or “substantially” expanded in the year preceding action on a public school desegregation plan “in the community” or up to three years following its final implementation. A school in this category would be classified as “reviewable.” It would then be required to show “significant minority enrollment” (at least “20 per cent of the percentage of the minority school-age population in the community served by the school”) or pass four of five other tests: (1) “significant” financial aid for minority students; (2) “vigorous” minority recruitment programs; (3) an “increasing” percentage of minority student enrollment; (4) employment of minority teachers and professional staff; (5) other “substantial” evidence of good faith involving minority contacts and participation. Schools that have been found guilty of discriminatory practices by a court would be subject to the same review.

Announcement of the IRS proposal last August sent shock waves throughout the religious establishment. (The bulk of the estimated 20,000 private schools in the United States have religious ties. These include 1,601 Roman Catholic high schools with nearly 900,000 pupils and 8,375 elementary schools with about 2.5 million pupils, according to Catholic records.) Many church leaders warned that the procedure, if adopted, would seriously violate First Amendment rights.

Some 250 persons were invited by the IRS to state their cases at a four-day public hearing, held last month in Washington at a government auditorium on Constitution Avenue. The speakers included members of Congress, other government officials, lawyers, clergymen, school administrators, and parents of private school students. Many praised the intent of the IRS proposal as being in accord with their own opposition to discrimination. Except for a handful of civil rights advocates, though, all the speakers—including representatives of Catholic, Jewish, and major Protestant school organizations—voiced their opposition to the proposal, and some speakers got standing ovations. IRS Commissioner Jerome Kurtz and six other high-ranking IRS officials took notes and promised to give special consideration to certain points with an eye toward possible revision of the proposed procedure.

The main arguments at the hearing:

• Some schools, like Jewish and Amish ones, are racially nondiscriminatory but would nevertheless flunk the IRS test.

• Church schools are extensions of churches, and the government has no right to regulate church affairs.

• The IRS proposal is legislative, and only Congress can legislate.

• The IRS assumption that a school is guilty until it proves itself innocent is contrary to American jurisprudence.

• Compliance would result in financial and administrative burdens that could destroy many schools whose budgets are already stretched thin.

• Key words in the procedure are vague, giving the IRS too much power of interpretation, and some provisions are impractical. For example, the “community” from which a church school’s pupils come may not necessarily have the same boundaries as the community or public-school district where the school is located. Also, a church school’s purpose may be to service its constituency through nurture and evangelism of the young; it would be wrong for the IRS to require such a school to “recruit” from society at large.

Several lawmakers announced that they will press for hearings in Congress early this year. About 100 Representatives signed a letter asking Kurtz not to implement the procedure until Congress has had “a full opportunity to examine all the issues in question.”

Kurtz is under no obligation to wait for instructions from Congress, says an IRS source, but he may decide that it is in everyone’s best interest to seek initial guidelines from Capitol Hill. In any case, says another IRS official, the avalanche of protest has ensured that the proposal will be modified.

So far, more than 115,000 letters, most of them critical of the proposal, have poured into IRS offices—a record for IRS mail—and thousands more have been sent to members of Congress.

The IRS proposal won support from the American Civil Liberties Union and from civil rights units within the Department of Justice and the Department of Health, Education, and Welfare. Chairman Arthur S. Fleming of the U.S. Civil Rights Commission called the plan “a necessary and long-overdue step forward in federal civil-rights enforcement.”

Chairman Clarence Mitchell of the Leadership Conference on Civil Rights, a proponent of the proposed plan, suggested that some organizations opposing the plan are Christian in name only. “With the procedure, maybe the IRS will be able to get into areas where the Lord hasn’t been able to,” he said.

Cults

Jonestown Unleashes A Shower of Fallout

“For the first week and a half after Jonestown, I did absolutely nothing else but answer the telephone,” said Robert Friedly, Christian Church (Disciples of Christ) communications officer.

Telephone calls from church members, who wanted to know the connection between their denomination and People’s Temple cult leader—Disciples of Christ pastor Jim Jones—had dwindled to about three per day last month, said Friedly. But continuing revelations in the press kept the 1.3-million-member denomination in the public eye (See the December 15 issue, page 38).

Press reports in the aftermath of the deaths last November of some 900 People’s Temple cultists in Guyana indicated that the denomination as early as 1974 investigated alleged “strong arm tactics” by Jones against members of People’s Temple. (The Ukiah, California, branch was incorporated as a congregation of the Disciples of Christ in 1965.)

Denominational president Kenneth L. Teegarden told Time magazine that his office had only “bare knowledge” of the Jones operation before the killings. (Time noted that two People’s Temple congregations were among the five largest in the church.) Teegarden also said that no action was taken against the church, since denomination policy did not provide for expulsion of a member congregation. He promised to discuss creation of such a policy at a March business meeting.

The United Methodist Church had its own statement on Jones, who once held a pastorate in a now defunct Methodist church in Indianapolis. Church records indicate that Jones in 1950 applied for membership in what was then the Indiana Annual Conference. The United Methodist Reporter said, however, that Jones was denied membership on the basis of psychological tests that showed him unfit.

Comments and reactions to the Jonestown massacre varied within the ranks of religious leaders. Evangelist Billy Graham told reporters that Jones and the People’s Temple had no relationship to Christianity, being a “perversion of religion, the work of Satan.” Some religious leaders feared that increased government intervention in religion would result from Jonestown.

A number of newspapers were demanding congressional hearings regarding religious cults, but certain political leaders, including President Jimmy Carter, urged against overreaction. U.S. Attorney General Griffin Bell said that the Justice Department wouldn’t begin any widespread investigation of unorthodox cults. That would infringe on First Amendment freedoms, he explained, and he added that investigations would be difficult, since the definition of “cult” is so unclear: “I’m a member of the Baptist church,” he told reporters. “I suppose I’m a cult member.”

Seventeen survivors of the Jonestown massacre were flown back to the United States last month. (A Guyanese official made public his estimate that as many as 700 of the dead had been forced to take poison rather than willingly commit suicide in obedience to Jones.) The seventeen, who were among eighty-eight known survivors, were ordered to appear before a grand jury in San Francisco.

In the meantime, more column inches and air time were being given to People’s Temple. According to an informal survey by CHRISTIANITY TODAY, the major secular media in the United States gave more coverage to the People’s Temple tragedy than to any other single religion-related story in recent memory. That includes the election and death of Pope John Paul I and the subsequent election of John Paul II.

Newspapers particularly gave an unprecedented amount of space to this religion-related story, agreed sources at the New York Times, the Washington Post, and the Los Angeles Times. Newsweek published a twenty-six page special report, and Time an eleven-page story.

Publishers Bantam and Berkley pushed into print with paperbacks on the subject—within days of the incident. The San Francisco Chronicle assembled a team of fifteen reporters to work with Ron Javers, staff correspondent who was wounded on the Guyana airstrip, and with coauthor Marshall Kilduff, who had been investigating the cult for two years. Bantam published the results. Washington Post editor and reporter Charles A. Krause, who was also in Jonestown, published with Berkley.

At least two religious book publishers also prepared manuscripts for publication this month. David C. Cook will publish the story of Bonnie Thielmann, a People’s Temple defector who, according to the editors at Cook, made a Christian commitment about a year ago. She had been in the Guyanese capital city of Georgetown helping people in the cult who wanted to leave, when the killings occurred at Jonestown.

Doug Wead, a minister and author of eleven books, and former People’s Temple member Philip Kerns, wrote the Logos book. It contains material from interviews with a former Jonestown resident who reportedly was still part of the inner circle in San Francisco.

Although about twenty cult members still remained behind the iron gates of the San Francisco temple last month, two surviving members of the board of directors filed a petition to dissolve its corporate status, according to the Los Angeles Times. San Francisco Superior Court was expected to issue a decree to dissolve the church and take control of its assets, which were reported at $11 million. The petition for dissolution would signal the legal demise of the temple, formed with the stated purpose of furthering “the Kingdom of God by spreading the Word.”

DEATHS

CECIL B. DAY, SR., 44, founder of Days Inns of America, board chairman of the Haggai Institute in Singapore, and a member of the American Bible Society board of governors, on December 15, in Atlanta, of cancer.

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