The all-white Prince Edward Academy in Southside Virginia is not entitled to tax-exempt status from the Internal Revenue Service because the school has failed to show that it does not discriminate in its admissions policies, a U.S. judge ruled here yesterday.

The Farmville, Va., school, started in 1959 by whites when the public schools were closed as part of the state's "massive resistance" to federally-ordered desegregation, had its tax-exempt status revoked by the IRS last October after U.S. District Court Judge John H. Pratt refused to stop the IRS.

Pratt's ruling yesterday, forecast by his earlier ruling, came in a suit filed by the academy for a declaratory ruling against the IRS. The IRS had told the academy that its tax-exempt status could continue only if it filed a required statement asserting that it was nondiscriminatory in its hiring and enrollment practices.

The school refused, arguing that the IRS requirement was a violation of its First Amendment right of free speech.

Pratt dismissed that argument yesterday as "not material." He then went on to rule that the IRS had a legal right, under the Constitution and federal law, to ask for a declaration of nondiscrimination before allowing the Prince Edward Foundation to enjoy tax-free status.

"Notwithstanding the absence of direct evidence in either party's favor," Pratt said, "it remains the [academy's] burden to establish that its policy is to admit black students on the same basis as those of other races. The [academy] has failed to present any evidence to that effect."

About $75,000 to $100,000 of the academy's annual budget of $740,000 is raised by donations to the foundation, according to Robert T. Redd, administrator and headmaster of the school. It is those donations that are placed in jeopardy by the loss of the academy's tax exempt status since donors would no longer be able to claim a charitable deduction for them on their income tax returns.