ABOUT A YEAR AGO, the Internal Revenue Service set out to put some teeth in the law that denies tax-exempt status to private schools that discriminate on the basis of race. Not surprisingly, it ran into trouble, and the more it tinkered with its proposed regulations, the louder the cries against them became. Now Congress is on the verge of forbidding the IRS to make any changes in its current regulations, thus permitting a small number of private schools to continue to make a farce out of the law.
Language to kill the proposed regulations was tacked onto the Treasury Department's appropriations bill on the floor of the House. The Sentate Finance Committee refused last Thursday to delete that rider after Sens. Robert Packwood and Daniel Moynihan attached the regulations, and the IRS, for "bias" and "hatred" toward religious schools.
But the problem the IRS is trying to solve has nothing to do with religious schools - unless they discriminate on the basis of race. The proposed regulations are aimed primarily at private schools that were created or suddenly expanded when nearby public schools were desegregated - like those "white academies" that sprang up all over the South in the 1960s. Currently, these schools get their tax-exempt status merely by saying publicly that they do not discriminate. The new regulations would require them to demonstrate, rather than just say, that they are not discriminating.
If Congress doesn't like what the IRS is trying to do, it can always write a new law giving tax-exempt status to those white academies or spell out precisely how the IRS is to determine which schools discriminate and which do not. Unless it is prepared to do either of those things, however, Congress should leave the proposed regulations alone. It makes no sense in terms of either tax or civil-rights policy to use a rider on an appropriations bill to stop the IRS from closing a loophole of this kind.