Proposed Federal Tax-Exempt Regulations: What Independent Schools Need to Know-Recording

Video Transcription

Video Summary

CASE hosted a webinar on proposed federal regulations that could affect the tax-exempt status of private schools, colleges, and universities. The proposal would interpret existing nondiscrimination rules to bar race-, color-, national-origin-, or ethnicity-based selection across school programs—not only admissions, but also scholarships, athletics, and affinity programs. CASE’s Brian Flahaven explained that the proposal relies partly on the 2023 Supreme Court decision on college admissions, while extending its implications beyond that ruling. The regulations are not final, and public comments are due November 3, with a hearing scheduled for December 2.<br /><br />CASE is concerned that potential revocation of tax-exempt status would severely harm schools’ finances and charitable giving, and that the proposal lacks clear enforcement procedures and adequate due process. CASE plans to comment, emphasizing philanthropy, donor intent, and the severity of the penalty. Schools were encouraged to consult legal counsel, review relevant policies and programs, inform leadership and trustees, and consider submitting comments.<br /><br />In discussion, CASE said open-to-all affinity groups may be less likely to be considered exclusive, but urged schools to seek legal advice. Speakers also addressed donor communications, endowed scholarships, individual comments, and the proposal’s stated focus on private institutions and race-related criteria.

Keywords

private schools

tax-exempt status

federal regulations

nondiscrimination rules

racial discrimination

scholarships

public comments

donor intent