New Revenue Procedure for Private School Publication Requirement

The IRS has released new guidance that simplifies compliance with decades-old rules relating to private school’s publication of policies related to racial non-discrimination.

To be tax exempt, schools are required to adopt a racially non-discrimination policy and operate in accordance with the policy.   (The history of these provisions is explained by the Supreme Court in the famous Bob Jones University decision.)

The guidance also requires exempt private schools, at least once annually, to publish a notice of their racially nondiscriminatory policy in a newspaper of general circulation that serves all racial segments of the community. Accordingly, private schools were required to pay an annual tithe to the local paper of their choice.

The IRS has now somehow noticed that “technological advances” have occurred since 1975 “including the advent and widespread use of the Internet.” 

Accordingly, the IRS had declared that it is now permitted, to allow, as an alternative, publication of their racially non-discriminatory policy on the school’s homepage.

In order to qualify, the full text of the notice needs to be on the homepage at all times and needs to be reasonably expected to be noticed.  The IRS has specifics on graphic treatment of the notice, so don’t give too much discretion to your web designer. The same model language from the old ruling can be used. 

As of this writing, a number of prominent private schools (such as Andover, Choate and Exeter) don’t appear to have switched, perhaps because maintaining their beautiful homepage is worth the inconvenience of the yearly publication requirement.

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