Tax-Exemption Controversy

Archive Report

New Interest in Old Debate

Reagan's Actions, Court Cases Renew Debate

Of the controversies that arose during President Reagan's first year in office, none was more politically damaging than the administration's decision to reverse a 12-year-old Internal Revenue Service (IRS) policy of denying tax exemptions to schools that discriminate on the basis of race. When the policy shift, which had a direct bearing on a pending Supreme Court case, was announced Jan. 8, civil rights groups accused the president of racism. When Reagan attempted to repair his image by submitting legislation patterned after the old IRS rule, right-wing politicians and organizations cried, “Betrayal.”

The press discussed the issue mainly in terms of President Reagan and his civil rights record. The president did more, though, than reopen old ...

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