Comments to the Proposed Regs: Racial Nondiscrimination in Private Schools

Published on: by Gene Takagi Category:CURRENT AFFAIRS & OPINION, DIVERSITY EQUITY INCLUSION, IRS & FEDERAL TAX ISSUES
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Last week, we posted on the Proposed Rule by the Internal Revenue Service titled Racial Nondiscrimination in Private Schools published on September 4. The comment period ended on November 3rd, and there are a few notable ones that had yet to be uploaded in Regulations.gov when we published the post. This week and next we’ll share two of these comments from widely respected academics who have contributed greatly to the area of laws affecting nonprofits and charities.

It’s important to recognize that the Proposed Rule could ultimately be promulgated by Treasury and the IRS, which are parts of the federal government’s executive branch. While the recent elections resulted in a very strong blue wave flipping both chambers of Congress as well as many state and local governments, the President remains leader of the federal executive branch. Of course, the election results shift power in multiple ways which could mean that the Proposed Rule is less likely to be promulgated as initially presented, particularly due to the more than 2,500 comments received, including from 20 states. But nonprofits need to be vigilant because of the possibility that the executive branch digs in on the issues raised by the Proposed Rule.

The first of these comments to the Proposed Rule we’ll be posting is from Roger Colinvaux, Professor of Law at Columbus School of Law, The Catholic University of America. Notably, from 2001-2008 he was Legislation Counsel at the nonpartisan Joint Committee on Taxation in the U.S. Congress with responsibility for tax legislation relating to nonprofit organizations, including charitable giving and reform legislation in the Pension Protection Act of 2006.

November 2, 2026

VIA REGULATIONS.GOV
Oluwafunmilayo A. Taylor
Section Chief, Publications and Regulations
Associate Chief Counsel
Internal Revenue Service
P.O. Box 7604, Ben Franklin Station
Washington, DC 20044

Re: Notice of Proposed Rulemaking, Racial Nondiscrimination in Private Schools, REG-119986-25, RIN 1545-BS05, 91 Fed. Reg. 56,811 (Sept. 4, 2026)

I am a Professor of Law at the Columbus School of Law, The Catholic University of America. Over my 30-year legal career in private practice, government service, and as a law professor, I have developed extensive expertise with the laws that concern nonprofit organizations, particularly tax-exempt charities under section 501(c)(3) of the Internal Revenue Code. I am a coauthor of the leading textbook on Nonprofit Organizations, and have written widely over decades about the charitable deduction and tax-exempt status. For seven years, I was Legislation Counsel with the Joint Committee on Taxation of the U.S. Congress, working on a nonpartisan basis to craft legislation for the tax-writing committees of the House of Representatives and the Senate. Whether working with Republicans or Democrats, I have always emphasized key principles of the law in this area, namely that the rules that regulate charitable organizations remain apart from political ideology and reflect nonpartisan values that bolster philanthropic and associational freedom. I write to comment on the Treasury Department’s( proposed regulations that articulate a new basis for revoking the tax-exempt status of private schools.


In 1983, the Supreme Court decided Bob Jones University v. United States.1 In that case, the Court said that tax-exempt status as a charity (or § 501(c)(3) organization) required that the charity not be contrary to fundamental public policy. Since then, the Internal Revenue Service (“IRS”) has kept the fundamental public policy test within the extremely narrow bounds of the Court’s guidance.

Bob Jones was an extraordinary case in which the Court developed an extraordinary doctrine to address a fundamental injustice and problem of historic proportion in American life: systemic anti-Black discrimination in education. Recognizing that determinations of fundamental public policy are “sensitive,”2 the Court said the doctrine should be invoked only when the policy is “firm,” when there is “no doubt”3 as to its established nature, and where there is clear direction from all three branches of the federal government over a significant period of time.4 The Court made the bar for “fundamental” public policy high because it knew that a “public policy” test for tax-exempt status was extra-textual, not explicitly directed by Congress, and was to embark on treacherous territory: potentially opening the door to abuse of power by the executive branch to make tax-exempt determinations based on the prevailing ideological winds of whichever political party was in power. Accordingly, over the 40-plus ensuing years, through Republican and Democratic administrations, the IRS has not extended Bob Jones beyond its limited reach.5 The proposed regulations are the first such effort.

The proposed regulations, however, are misguided and should be withdrawn. The regulations, if finalized, would condition the charitable tax status of the Nation’s more than 18,000 private schools (kindergarten through higher education)6 on the absence in a school of any discrimination based on race, ethnicity, or nationality, for any purpose, whether or not the discrimination was lawful, intended, or invidious.7 The regulations would invite the IRS into most every private school in America – large and small, urban and rural – to police that school’s adherence to its boundless “no discrimination” rule. The regulation is a harbinger not of a discrimination-free private educational system but of the creep of the police power over private schooling. Civil rights is not the IRS’s job, nor should the IRS become an agency for the federal government to monitor private, lawful conduct and free association.

Apart from the deeply misguided nature of the proposed regulation, as a matter of law, the sweeping “nondiscrimination” policy of the rule does not meet the Bob Jones test. Bob Jones was a response to the racially exclusionary policies of two private schools that barred admissions to Black students and banned interracial dating. Both policies were based on anti-Black segregationist practices from the Jim Crow era, and were part of a broader social problem of private schools’ intent on maintaining segregation in education after the Court banned segregation in public schools in its landmark, unanimous, Brown v. Board of Education decision. As the Court noted in Bob Jones, these private efforts at segregation spanned decades, and were at the forefront of public policy reform efforts in all three branches of the federal government. In other words, anti-Black discrimination in private education was an identifiable scourge contrary to, as the Court concluded, the fundamental public policy of the United States and so anathema to tax-exempt status as a charity.

In reaching its conclusion that anti-Black discrimination in education was contrary to fundamental public policy, the Bob Jones Court relied not only on the Brown decision, and the “unbroken line of cases following” it,8 but the actions of other branches of government that occurred in Brown’s wake, over decades. These included the seminal civil rights laws of the 1960s that were aimed at invidious (not remedial) discrimination and the “consistent” action of the Executive Branch, including Executive Orders from Presidents Truman, Eisenhower, and Kennedy.9 Manifestly, what is required for a policy to become “established” is the passage of time: “Over the past quarter of a century, every pronouncement of this Court and myriad Acts of Congress and Executive Orders attest a firm national policy to prohibit racial segregation and discrimination in public education.”10 Perhaps equally important, to be “fundamental,” the issue must be of historic importance. The anti-Black policies advanced by the two schools at issue in Bob Jones, were a vestige of “the shackles of the ‘separate but equal’ doctrine of Plessy v. Ferguson.”11 There are “[f]ew social or political issues in [the Nation’s] history” like anti-Black discrimination in education.12

By contrast, the proposed regulations do not address a comparable social problem. As an initial matter, the proposed regulations are not targeted to any particular social ill, but maintain that any discrimination based on race, ethnicity, or nationality, in an educational setting for any purpose is contrary to fundamental public policy.13 This blanket prohibition would encompass scholarships, curriculum choices, counselling, training, student clubs, or any other school program or practice where race, nationality, or ethnicity might be considered in some way, even if the program or practice was intended to help students facing particular challenges, and where their race, ethnicity, or nationality might be relevant to consider those challenges.

As but one example, scholarships that consider race, ethnicity, or nationality have a long history in the United States as tools to enable students from certain backgrounds to have educational opportunities. Creating such opportunities for education, if it is viewed as a social ill at all, is not comparable to the systemic segregation and targeted exclusion historically faced by Black students, which was the ill that Bob Jones responded to. There is no evidence that Congress, the courts, and the executive branch have established a consensus that such scholarships are against the fundamental public policy of the United States, much less that remedial-based discrimination of any sort is against fundamental public policy. For support of its sweeping rule, the preamble to the regulations cites Students for Fair Admissions, Inc. v. President & Fellows of Harvard College (SFFA).14 Yet this case addressed a narrow issue: affirmative action in higher education admissions. SFFA did not purport to bar any form of
“discrimination” in private schools for any purpose, and certainly did not address scholarships, student clubs, counseling programs or the like.

The preamble to the proposed rule also discusses several Supreme Court decisions over decades that led up to SFFA’s holding.15 But these cases all allowed affirmative action in some form, including non-invidious, remedial discrimination. Thus, whatever policy emanates from SFFA, it is at best three years old and is not supported by a long line of case as suggested by the preamble. The preamble also implies that Bob Jones and the IRS rulings that preceded it support the new “no discrimination for any purpose” rule.16 While these authorities do use general phrasing that racial discrimination in education is contrary to public policy, the generally accepted meaning of “discrimination” at the time of those decisions, and the ill to which they were directed, was exclusionary or “invidious” discrimination, not remedial. In fact, current tax-exemption law, as expressed in the very rulings cited by the proposed regulations, and others not cited, explicitly allow remedial discrimination as consistent with section 501(c)(3).17 Further, Executive Orders, in effect since early 2025, had made positive, remedial forms of discrimination the “responsibility of the whole of our Government.”18 Although the Trump Administration strongly disagrees with that claim,19 the fact of the different approaches from one year to the next demonstrates that a blanket “no discrimination rule” that disallows remedial discrimination is far from an established or fundamental public policy within the meaning of Bob Jones.

It is clear then that the policy of the proposed regulations is to bar discrimination in any form, including remedial “discrimination.” In adopting that approach, the proposed rule advances a broader concept of problematic discrimination than what currently runs afoul of the “fundamental” test.20 Yet the proposed rule does not define its operative term, “discrimination.” According to one dictionary definition, to discriminate means to “distinguish with the mind; perceive the difference in or between.”21 Without a clear legal definition of the conduct that is barred, the concept of “discrimination” has no meaningful limit. In a society that was free of “discrimination,” there would be no perception in difference among people based on skin color, ethnicity, or nationality. But that does not describe the contemporary United States. Teachers, administrators, students; all undoubtedly take note, to some degree, of a person’s race, ethnicity, or nationality. Doing so will often make sense, and even be unavoidable to the extent that race, ethnicity, and nationality are part of a person’s identity. Anti-bias training may focus on race, ethnicity, and nationality. Student groups may and do form based on these characteristics. Counselling may relevantly take race, ethnicity, or nationality into account to be effective. To operate under the rule’s commandment of “thou shall not discriminate,” would be to check one’s behavior at every turn, an Orwellian prospect.22

Importantly, far from being contrary to fundamental public policy, some “discriminatory” behavior advances key policy goals that undergird civil society organizations. As Justice Powell wrote in his Bob Jones concurrence, “tax exemptions [for § 501(c)(3) organizations] encourag[e] diverse, often sharply conflicting, activities and viewpoints,”23 contributing importantly “to the diversity of association, viewpoint, and enterprise essential to a vigorous, pluralistic society.”24 Thus, section 501(c)(3) status “is one indispensable means of limiting the influence of governmental orthodoxy on important areas of community life.”25 The government’s interest in pluralism, Justice Powell said, means that “preserving an area of untrammeled choice for private philanthropy is very great.”26 Thus, for the proposed regulations to condition tax-exempt status on “nondiscrimination” is “to enforce government orthodoxy and viewpoint conformity on private associational life.”27

The proposed rule’s shortcomings are not fixable. The Court in Bob Jones set the bar for fundamental public policy extraordinarily high. Bob Jones sensibly requires a policy consensus among the three branches of government consistently expressed over time on a matter of great national importance. The proposed regulations do not meet that test.

Further, and perhaps even more importantly, a low bar for delineations of fundamental public policy, like that asserted by the proposed regulations, would undermine the independence of civil society organizations. If charitable tax status is won or lost based on a conclusion that the prevailing public policy of any given Administration is “fundamental,” whether on the political left or political right, no charitable organization could safely operate to pursue a mission free of government orthodoxy. If the proposed rule passes muster as articulating a fundamental public policy, no future administration would be prevented from basing tax-exempt status as a charity on its favored Supreme Court ruling, combined with whatever Executive Order the President decides to write.28 The President should not have the authority effectively to declare what counts as “charitable” and tax-exempt in society. That is Congress’s job, working through the legislative process.29

The fact that Bob Jones was a decision of statutory interpretation emphasizes that these proposed regulations, if finalized, should receive no or hardly any deference by the courts. Arguably, if the Bob Jones decision were decided under today’s principles of administrative law and statutory interpretation, the Court would have been hard pressed to disagree with Justice Rehnquist’s text-based dissent in Bob Jones. Plainly put: the statutory text contains no public policy limit on tax-exempt status.30 Bob Jones of course is valid precedent and deserves respect. But to extend an already attenuated interpretation of the statute to bar any discrimination in a private school for any purpose is to stretch the statute beyond any reasonable intent of Congress. Courts should reject the effort as outside the authority of the Treasury Department as neither reasonable nor necessary to implement Congressional intent.31

The proposed regulations also raise other important concerns. Although the preamble to the regulations purports to exempt religious-based discrimination from the proposed rule,32 the rule itself provides no such exemption. Further, even if the proposed rule is revised to add an explicit exception for religious-based discrimination, many religious and secular schools nonetheless would be in an absurd Catch-22. While assertedly allowing religious-based discrimination, the proposed rule bars discrimination based on ethnicity or nationality. Thus, a teacher or administrator’s conduct, for example, with respect to a Jewish student (including inclusive, supportive conduct) might or might not result in revocation of the school’s tax status depending on whether the reason for the discrimination is based on the student’s religion, ethnicity, or nationality: each of which could be implicated with respect to a Jewish student.33 Startlingly, the IRS – the Nation’s tax collection agency – would have the authority to audit an organization and quiz administrators on the reasons for their actions to establish if the person acted, again regardless of the reason, on the basis of religion, ethnicity, or nationality. Such a rule is simply untenable.

The proposed rule also has serious First Amendment implications. Rights to speech and association are protected by the First Amendment. Schools are associations of students, teachers, administrators, and trustees, all with a common purpose of furthering education. An unbounded “no discrimination” rule would chill speech and association throughout the school environment, as all community members would face pressure to disregard the particularized educational needs of students for risk of losing valuable tax benefits.34 The clear First Amendment implications of the proposed rule thus further warrant a statutory interpretation that avoids constitutional conflict,35 that is, Bob Jones should not be construed beyond its narrow bounds.

In short, the proposed regulations should be withdrawn. They fail the test of Bob Jones: there is no fundamental public policy against all racial, ethnic, or nationality-based discrimination by a private school, and especially not against non-invidious conduct intended to help students with particularized needs. In addition, the proposed regulations are not a reasonable interpretation of the statue, and raise matters of grave concern under the First Amendment. To the extent the proposed regulations express a policy that is or should be relevant to tax-exempt status under section 501(c)(3), Congress, not the Internal Revenue Service, must decide.

The Court in Bob Jones set the bar for fundamental public policy intentionally high for a reason: to prevent intrusions by the government into the lawful, private conduct of charitable organizations to pursue their purposes free from government orthodoxy or compulsion.

Respectfully submitted,

Roger Colinvaux
Professor of Law
Columbus School of Law
The Catholic University of America

  1. 461 U.S. 574 (1983).
  2. 461 U.S. at 592.
  3. Id.
  4. Id. at 593.
  5. See Roger Colinvaux, Charitable Giving and Civil Rights: A Defense of Private Remedial Action, 135 YALE L. J. 549, 600-01 (2025) (noting that the IRS has used the Bob Jones test as an independent basis for revocation within the confines of anti-Black discrimination in education); Richard Schmalbeck, Bob Jones and the Public Policy Doctrine, 40 Years Later, N.Y.U. NAT’L CTR. ON PHILANTHROPY & L. 29, 33 (2024) (finding that on occasion the IRS casually invokes the public policy doctrine in other contexts when there are alternative reasons for disqualifying an organization).
  6. 91 Fed. Reg. 56,811, 56,818 (Sept. 4, 2026) (noting that “as many as 18,000 private elementary, secondary, and post-secondary schools” are affected).
  7. Id. at 56,815 (proposal would apply to “all forms of racial discrimination in education, regardless of the intent behind or the legality of such discrimination”).
  8. 461 U.S. at 593.
  9. Id. at 594-95 (citing “but a few of numerous Executive Orders over the past three decades”).
  10. Id. at 593.
  11. Id. at 595.
  12. Id.
  13. 91 Fed. Reg. 56,811, 56,819 (Sept. 4, 2026) (stating, in the text of the proposed rule, that “discrimination on the basis of race, color, or national or ethnic origin includes any discrimination on the basis of race, color, or national or ethnic origin for any purpose”).
  14. 600 U.S. 181 (2023).
  15. See Part III of the Preamble: “Developments Regarding Racial Discrimination in Education” at 91 Fed. Reg. 56,814-15 (Sept. 4, 2026).
  16. See Part II of the Preamble: “Policy of the United States Against Racial Discrimination in Education” at 91 Fed. Reg. 56,812-13 (Sept. 4, 2026).
  17. Roger Colinvaux, Charitable Giving and Civil Rights: A Defense of Private Remedial Action, 135 YALE L. J. 549, 569-570 (2025) (noting authorities).
  18. Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, Exec. Order No. 13,985, 86 Fed. Reg. 7009 (Jan. 20, 2021).
  19. Ending Illegal Discrimination and Restoring Merit-Based Opportunity, Exec. Order No. 14,173, 90 Fed. Reg. 8633 (Jan. 21, 2025).
  20. 91 Fed. Reg. 56,816 (Sept. 4, 2026) (stating that the proposed rule would “define race-based action for the purpose of ameliorating societal discrimination [is] a form of discrimination”).
  21. The New Shorter Oxford English Dictionary, Vol. 1 A-M (Clarendon Press 1993) (reciting the second listed definition of “discriminate”). The first listed definition of “discriminate” is to “[m]ake or constitute a difference in or between; distinguish, differentiate”). Id. Relatedly, the first definition of “discrimination” is “[t]he action or an act of discriminating or distinguishing; the fact or condition of being discriminated or distinguished; a distinction made.” Id.
  22. To further subject administrators to parent and student whistleblowers who could “tell on” them, say by an online reporting portal – would render teaching many controversial subjects, and even some basic social interactions, an exercise in avoiding thought-police. Consider for example an innocent interaction between teacher and student. Teacher: “Where is your family from?” Student: “We came from X country.” Teacher: “Oh, that’s interesting. We’d better not talk about that though. Your nationality is not relevant to our conversation.”
  23. 461 U.S. at 609 (Powell, J., concurring).
  24. Id. (quoting Walz v. Tax Comm’n, 397 U.S. 664, 689 (1970) (Brennan, J., concurring)).
  25. Id.
  26. Id. at 609-10 (quoting Jackson v. Statler Found., 496 F.2d 623, 639 (2d Cir. 1974) (Friendly, J., dissenting)).
  27. Quoting Roger Colinvaux, Charitable Giving and Civil Rights: A Defense of Private Remedial Action, 135 YALE L. J. 549, 607 (2025).
  28. Id. at 599-609 (noting “public policy whiplash”); Ellen Aprill Once and Future Revocation of Tax Exemption: Public Policy, Illegality, Terrorism, and Charitable Purpose, 79 TAX LAW. 277, 291 (2026) (warning against “public policy whipsaw” in which charities would be “gaining and losing qualifications for exempt status as administrations and their policies change”).
  29. 461 U.S. 598 (n. 23) (noting that the IRS is not “invested with authority to decide which public policies are sufficiently ‘fundamental’ to require denial of tax exemptions”) (quoting and agreeing with Justice Powell). See also Colinvaux, Remedial Action at 603.
  30. 461 U.S. at 612-613 (“there is nothing in the language of § 501(c)(3) that supports the result obtained by the Court . . . . Nowhere is there to be found some additional, undefined public policy requirement”) (Rehnquist, J. dissenting).
  31. I.R.C. § 7805(a) (authorizing the Secretary of the Treasury Department to write “needful rules and regulations . . . as may be necessary by reason of any alteration of law in relation to internal revenue”); Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024). See Michael J. Graetz, A Presidential Assault on Pluralistic Democracy: The IRS’s Attack on Private Schools, 192 TAX NOTES 2095, 2098 (2026) (discussing the proposed regulations and noting that after Loper Bright “deference by courts to rules promulgated by administrative agencies has significantly diminished”).
  32. 91 Fed. Reg. 56,815 (Sept. 4, 2026) (asserting that the proposed rule would not prevent a school “from maintaining a religious mission, curriculum, or program of observance, or from selecting students on the basis of religious affiliation or membership” and that “religiously based selection” is permitted).
  33. The preamble to the regulation makes clear its intent that the religious-based exception would apply only if the discrimination is “solely” for religious reasons, not for reasons of ethnicity or nationality. Id. (providing that religious discrimination is allowed “so long as the selection criteria is based solely on religion and not on shared ancestry or ethnic characteristics).
  34. In two recent decisions, the Supreme Court has emphasized that government rules that impact association are subject to exacting scrutiny. Americans for Prosperity Foundation v. Bonta, 594 U.S. 595 (2021); First Choice Women’s Resource Centers v. Davenport, 608 U.S. 174 (2026). The Court also protects the expressive association rights of charities. Roberts v. United States Jaycees, 468 U.S. 626 (1984); Boy Scouts of America v. Dale, 530 U.S. 640 (2000). See also two decisions invalidating the Department of Education’s proposed regulations attempting to disqualify certain § 501(c)(3) organizations from the public service loan forgiveness program. Robert F. Kennedy Center for Justice and Human Rights v. McMahon, 837 F.Supp. 3d 99 (D.D.C. 2026) (finding that the statute did not provide a textual basis for the Secretary of Education to pick and choose among qualified § 501(c)(3) organizations), and National Council of Nonprofits v. McMahon, 836 F.Supp. 3d 265 (D. Mass. 2026) (holding that the Department of Education’s definition of qualified employer exceeded statutory authority, was arbitrary and capricious, and unconstitutional viewpoint discrimination). The proposed regulations also suffer from vagueness concerns.
  35. Ashwander v. Tennessee Valley Authority, 297 U.S. 288 (courts should avoid interpretations of a statute that are of constitutional doubt) (Brandeis, J. concurring); Jennings v. Rodriguez, 583 U.S. 281, 296 (2018) (noting that the canon of constitutional avoidance “comes into play . . . when, after the application of ordinary textual analysis, the statute is found to be susceptible of more than one construction”) (quoting Clark v. Martinez, 543 U.S. 371, 385 (2005)).