racist follies at Auburn

[Timothy Francis-Wright]

Christian Gregory wrote:
> Date: Wed, 7 Nov 2001 13:21:45 -0600
> Subject: Re: racist follies at Auburn
> 
> If it were just follies. As at many places in the South, the greek 
> system at Auburn is completely segregated. Every time one of my 
> students writes an essay defending how honorable fraternities and 
> sororities are, I always ask them why they don't allow black people 
> in them. They stare blankly and continue to babble about how they 
> honor "diversity."  It is classic denegation on a group scale.
>         

Most fraternities have a federal tax exemption under section
501(c)(7) as social clubs.  Longstanding IRS policy is to treat
fraternities as social clubs and not as educational institutions
under section 501(c)(3).  The (c)(7) exemption applies only to "exempt
function income"--the dues paid by members as well as charges for 
goods and services.  Other income, including at investment income
over $1,000 is taxed.

Since 1976, Section 501(i) of the Internal Revenue Code prohibits
an exempt social club from having a charter, governing instrument, or 
written policy statement providing for discrimination on the basis of 
race, color, or religion.  (A 1980 amendment allowed auxiliaries of
religious organizations and the like to restrict membership based
on religion in certain circumstances.)  

If the racist actions at the Auburn fraternities are in any way 
based on written policies, then they can and should be stripped 
of their tax exemptions.

Tim Francis-Wright