Special to the JTA Irs Determined to Avoid Adverse Impact on Jewish Day Schools in Its Revision of R

The Internal Revenue Service (IRS) indicated at a special meeting with representatives of six private school agencies last Thursday that it was determined to avoid any adverse impact on Jewish day schools in its revision of regulations to decide which private schools are entitled to tax exempt status, one of the Jewish representatives at the meeting said today.

The special meeting was called by the IRS Commissioner, Jerome Kurtz, after the IRS received many complaints, by mail and at three days of recent hearings, on proposed regulation changes, geared to finding whether a particular non-public school was guilty of racially discriminatory admission policies and not entitled to tax exemption.

Rabbi Bernard Goldenberg, chairman of the executive committee of Torah Umesorah, the National Society for Hebrew Day Schools, and Dennis Roars, executive director of the National Jewish Commission on Law and Public Affairs (COLPA), appeared for Jewish day schools. The other organizations represented at the hearing were the Council for American Private Education, the National Association of Independent Schools, Christian Schools International, and Lutheran and Seventh Day Adventist Schools.

BACKGROUND OF THE ISSUE

The issue dates back to July 1970 when the IRS announced guidelines to deny tax exempt status to racially discriminatory private schools, reportedly aimed at academies organized by white parents opposed to attendance by their children at integrated public schools. The guidelines excluded private schools in which student admission policies had no relation to racial considerations, referring specifically to religious schools.

The exemption of Jewish and other religious non-public schools was affirmed by a 1975 IRS ruling but concern of Jewish organizations was aroused by what they considered ambiguities in proposed 1978 revenue procedures, as such IRS regulations are called.

The 1978 proposals, while specifying that the proposed revisions were not to apply to church-related and church operated schools” cited in the 1975 ruling, proposed nevertheless that tax exempt private schools would have to meet “certain affirmative record keeping and publicity requirements along with other guidelines for determining whether schools have racially discriminatory policies as to students.”

The revisions are aimed at private schools in areas in which public schools are being or have been integrated. Under the proposed revisions, such private schools would be presumed to be discriminatory if their minority enrollment was not at least 20 percent of the local school age minority population, if there had been a substantial increase in white student enrollment which may be related to the integration of the area’s public schools. The burden would be on the school to satisfy the IRS that it did not discriminate against minorities.

JEWISH GROUPS ASKED TO TESTIFY

Jewish organizations, concerned that Jewish day schools might be inadvertently involved, asked to testify at hearings arranged by the IRS for Dec. 4 and extended two days in response to mounting protests from private school groups. To clarify the issue and reinforce the tax exemption for Jewish day schools, two groups of Jewish organizations sent to the hearings in December Martin Cowan, COLPA vice-president, and Nathan Z. Dershowitz, director of the Commission on Law, Social Action and Urban Affairs of the American Jewish Congress.

They testified that few Blacks, Orientals or members of other minorities in this country are Jewish and therefore very few students at Jewish religious schools are members of such minorities. They also testified that the undeniable consistent growth in Jewish day school student populations results from the way such schools are organized, starting usually with a kindergarten and first grade and adding grades annually as pupils prepare for promotion to the next grade.

Goldenberg said the meeting last Thursday was called to discuss changes the private school officials considered necessary in the proposed 1978 revisions to avoid ensnaring non-discriminatory private schools through what IRS officials conceded was overbroad language.

Kurtz told the non-public school representatives that the object of the proposed revisions was to deny tax exemption to schools which declared their admission policies were racially non-discriminatory when they were discriminatory. He said the mechanical approach of a percentage relation to local minorities had been chosen for that purpose but he acknowledged such an approach could have impact on such schools as Jewish religious schools where the approach was essentially inappropriate.

Under the initial version of the 1978 proposed changes, it was to be axiomatic that if a school failed the 20 percent proportion test, it would be required to take such steps as to advertise for minority children and otherwise recruit such children as well as take other “affirmative actions.”

TO CONSIDER OTHER FACTORS

Asking the school representatives for proposals to improve the revised proposals, Kurtz said that while the IRS intended to retain a statistical yardstick, if would not necessarily be 20 percent and that IRS auditors would be instructed to consider other factors, such as the lack of Black or Oriental Jews in the Jewish religious school area where integration had or was taking place.

Rapps said he expected that the ultimate final form of the revisions, with the safeguards Kurtz had mentioned, would protect the non-Orthodox as well as Orthodox Jewish religious schools. Kurtz said the final revision of the 1978 revenue procedures would be completed and adopted by the IRS within the next six to eight weeks. In response to the IRS invitation, Rapps said, COLPA will submit data on the number of Black Jews in Jewish day school areas.