Journal of Legal Education, Vol. 54, No. 3 (September 2004), pp. 336-350

Abstract

What is the relevance of race to tax law? The race issues are apparent when one studies a subject like constitutional law. The Constitution concerns itself explicitly with such matters as defining rights of citizenship, allocating powers of government, and determining rights with respect to property. Given the history of our country -- with slavery followed by periods of de jure and de facto racial discrimination -- these constitutional law matters obviously must have racial dimensions.

Tax law, however, does not generally concern itself explicitly with matters of race. Tax law is often thought of as completely race neutral in that its rules do not explicitly hinge tax consequences on matters related to race. In fact, even though the Internal Revenue Code refers to discrimination based on nonrace factors twenty-six times, it expressly refers to the concept of racial discrimination only twice, once with regard to racial discrimination by tax-exempt social clubs and once with regard to the foreign tax credit for taxpayers that participate in international boycotts that promote racial discrimination. But despite the paucity of express racial references in the code itself, there are a myriad of implicit racial issues in tax law that mostly concern the federal tax imposed on individual income or wages. One well-known example is the racial bias inherent in the marriage penalty as a result of a combination of tax law rules and the lingering effects of slavery and postslavery discrimination against blacks. Though teachers of tax law are often quite familiar with this and with similar race issues related to the federal taxes imposed on individual income and wages, few are as familiar with the many ways in which race affects our understanding of tax laws that apply to organizations, particularly tax-exempt nonprofit organizations. This article focuses exclusively on the law of tax exemption (familiarly known as “tax exempt law”), attempting to explain many of the instances in which race is relevant to an understanding of this growing area of legal study.

This article is divided into three parts. The first part discusses the long-running examination of race in areas like constitutional law where it is obviously linked. The second part turns to race discussion in tax law, demonstrating that much of the racial focus in tax law has been on race bias in federal taxes imposed on individual income and wages. The third part outlines ways in which race can be discussed in a particular area that has yet to receive a full examination of race issues-tax exempt law. It shows that issues of racial discrimination, racial diversity, and racial perspectives might inform and improve certain aspects of tax exempt law. The article concludes that the expansion of legal scholarship and law teaching about race to such neutral-looking areas as tax exempt law can provide opportunities for discovery of new and likely better visions of tax law.

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