Since the Supreme Court decision to legalize gay marriage, many things have been the cause of worry. Most recently, the thing that’s causing worry is whether or not the IRS will take action over tax exemptions for colleges. Some colleges, such as Brigham Young University, have a religious standard that their students must follow. In many cases, gay marriage is not part of that. Colleges that are not allowing students to participate in gay marriage are worried that the IRS will take their tax exemptions away.
Right now, the tax exemptions for religious colleges and colleges alike are classified as educational institutions. This also allows the donations made to the schools to be tax free. The IRS closely examines the donations made to the schools since the schools must follow a certain set of rules.
IRS Commissioner Josh Koskinen stated recently that there was no need for colleges to worry for the next two and a half years (as this is the last part of his term as IRS Commissioner). While this is comforting to some, Mike Lee (Utah senator) is calling colleges to continue to worry. Lee, an alumni of Brigham Young University, appreciates that the IRS is not going to do anything for a couple of years. However, he is calling for everyone to worry more because the IRS hasn’t completely banned the removal of tax exemptions of religious institutions.
One reason that everyone is worried is the case against Bob Jones University in South Carolina. The ruling stated that the university was not eligible for a tax exemption because the university wasn’t allowing interracial marriage or dating. In the near future, this will not be an issue. However, analysts and legal scholars are concerned about whether or not there should be more concerned in the long term.
Marcus Owens, a retired IRS senior official, believes the concern that colleges have is premature. At best, there is little basis for the concerns. Owens went so far as to say that there was no basis, at all, for the concerns at the moment.
Whether colleges are concerned or not about loosing tax exemptions, the IRS has stated that they will not act within the next two and a half years unless the courts or Senate pushes them to.