CEC Blasts Bill to Exempt Certain Nonprofits from 501(c)(3) Requirements 

CEC Chair Rep. Mark Takano: “Republicans are trying to overturn this decades-old precedent, so that religious organizations can unlawfully discriminate in certain areas and still be eligible for tax-exempt status."

Washington, DC — After the GOP-controlled House Ways and Means Committee advanced H.R. 9722—a bill that would exempt religious nonprofits from longstanding requirements for 501(c)(3) organizations in order to empower them to discriminate—out of committee, Chair of the Congressional Equality Caucus Rep. Mark Takano released the following statement:

"In the 1970’s, the IRS revoked a university’s tax-exempt status for discriminating against interracial couples, and the Supreme Court upheld this decision because tax-exempt organizations can’t be “contrary to established public policy.” This shouldn’t be controversial in 2026. Yet, Republicans are trying to overturn this decades-old precedent, so that religious organizations can unlawfully discriminate in certain areas and still be eligible for tax-exempt status," said Rep. Mark Takano, Chair of the Congressional Equality Caucus. "Religious freedom is fundamental American value but, we should not be creating a new carve-out to 501(c)(3) requirements that prioritize certain religious practices—especially not to empower discrimination against minorities. I’m going to keep fighting to prevent this bill from becoming law."


BACKGROUND
On January 19, 1976, the IRS revoked the tax-exempt status of Bob Jones University, which denied admission to applicants who were in an interracial marriage or were known to advocate interracial marriage or dating. Bob Jones University later sued to recover taxes it had paid to the IRS, and in Bob Jones Univ. v. United States, the Supreme Court upheld the revocation of Bob Jones University’s tax-exempt status. The Supreme Court held that “an institution seeking tax-exempt status must serve a public purpose and not be contrary to established public policy” and “that racial discrimination in education violates a most fundamental national public policy, as well as rights of individuals.”

H.R. 9722, the so-called “Fair Treatment of Religious Organizations Act,” would amend Section 501 of the Internal Revenue Code of 1986 to add that a “a religious belief or practice concerning marriage, sexuality, or gender identity shall not be treated as being inconsistent with law or public policy.” It would also add that “a belief shall not fail to be treated as a religious belief merely because such belief is not compelled by or central to a system of religion.”

This would permanently exempt organizations from the 501(c)(3) public policy requirement when it comes to their practices concerning marriage, sexuality, and gender identity—no matter how egregious those actions are. This would not just impact practices related to same-sex marriage, it would also impact practices relating to interracial marriage, polygamous marriage, and child marriages. This would overturn Bob Jones University v. United States and create a long-term backdoor exemption to nondiscrimination laws as they relate to marriage, sexual orientation, and gender identity so organizations can violate these laws without it jeopardizing their tax-free status.