For more than forty years, Bob Jones University v. United States has stood for the proposition that qualification under § 501(c)(3) requires more than satisfying the literal categories in the statute. In Bob Jones Univ. v. United States, 461 U.S. 574, 585–96 (1983), the Court held that an educational institution that engages in racial discrimination is not a “charity” entitled to tax exempt status under Internal Revenue Code § 501(c)(3) since racial discrimination in education violates a “fundamental public policy.” On September 4, 2026, Treasury and the IRS proposed regulations that would deny § 501(c)(3) status to a private school that uses race, color, or national or ethnic origin in administering virtually any school policy or program. The proposal expressly reaches race-conscious measures adopted for remedial or diversity purposes. Racial Nondiscrimination in Private Schools, 91 Fed. Reg. 56,811 (Sept. 4, 2026) (proposed rule) (REG-119986-25).
Steven Toscher is the Managing Principal of the law firm and specializes in civil and criminal tax controversy and litigation. Mr. Toscher is a Certified Tax Specialist in Taxation, the State Bar of California Board of Legal Specialization, a Fellow of the American College of Tax Counsel and has received an “AV” rating from Martindale Hubbell. Mr. Toscher serves as Co-Chair of the UCLA Tax Controversy Institute and Co-Chair of the ABA Criminal Tax Fraud and Tax Controversy Conference. Mr. Toscher is a frequent lecturer and author on tax controversy and litigation topics and is a co-author of the BNA Portfolio, Tax Crimes. Mr. Toscher was the 2018 recipient of the Joanne M. Garvey Award, given annually to recognize lifetime achievement and outstanding contributions to the field of tax law by a senior member of the California tax bar. Mr. Toscher is also the recipient the USD School of Law Richard Carpenter Excellence in Tax Award. In 2024 Mr. Toscher was the recipient of the prestigious Jules Ritholz Memorial Merit Award presented by the Civil and Criminal Tax Penalties Committee of the Taxation Section of the American Bar Association, recognizing tax lawyers who have demonstrated outstanding dedication, achievement and integrity in the field of civil and criminal tax controversies.
For more information, please contact Steven Toscher at toscher@taxlitigator.com.
Philipp Behrendt is a Principal at Hochman Salkin Toscher Perez P.C., licensed in California as well as in Germany and assists in advising clients in civil and criminal tax controversies as well as international money laundering investigations stemming from tax avoidance structures. He also focuses on the technical aspects involved in advising voluntary disclosures in connection with DeFis, NFTs, and other crypto assets. Philipp is a Liaison to the Young Lawyer Committee for the ABA Tax Section’s Civil and Criminal Tax Penalties Committee and served on the Beverly Hills Bar Association’s Barristers Board of Governors from 2022 to 2023. Philipp is the Chair of the Beverly Hills Bar Association’s Tax Section and the Blockchain and Web3 Law Section.
For more information, please contact Philipp Behrendt at behrendt@taxlitigator.com.
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