In Revenue Procedure 2019-22, the IRS updates the 1975 ruling (Revenue Procedure 75-50) that required each private school to annually announce its racial nondiscrimination policy, either in the newspaper or through the broadcast media; the new ruling provides that public disclosure of a private school’s nondiscrimination policy may also be accomplished through the school’s website.

The IRS listed the updating of Revenue Procedure 75-50 as a priority on its Priority Guidance Plan as far back as fiscal year 2009 (see, 2008--2009 Priority Guidance Plan).

Background                            

Revenue Procedure 75-50 established the requirements for determining whether a private school that qualifies for, or is applying for, IRC Section 501(c)(3) status has adopted a “racially nondiscriminatory policy regarding students” and operates in accordance with that policy. Section 4.03 of Revenue Procedure 75-50 requires a private school to inform the public about its racial nondiscrimination policy by either (1) annually publishing a notice of the policy “in a newspaper of general circulation that serves all racial segments of the community” or (2) providing notice of the policy through “the broadcast media.” 

Revenue Procedure 2019-22

Technological advances since 1975, particularly the advent of the internet, provide another means by which a private school may publicize its racial nondiscrimination policy to the community served by the school. Therefore, Revenue Procedure 2019-22 modifies section 4.03 of Revenue Procedure 75-50 by adding a third publication option. Specifically, a private school “may display a notice of its racially nondiscriminatory policy on its primary publicly accessible Internet homepage at all times during its taxable year (excluding temporary outages due to website maintenance or technical problems) in a manner reasonably expected to be noticed by visitors to the homepage.”

Wording. The same wording may be used for a webpage notice as had been used for publication in a newspaper. Revenue Procedure 2019-22 offers the following as an example of acceptable wording:

NOTICE OF NONDISCRIMINATORY POLICY AS TO STUDENTS

The M school admits students of any race, color, national and ethnic origin to all the rights, privileges, programs, and activities generally accorded or made available to students at the school. It does not discriminate on the basis of race, color, national and ethnic origin in administration of its educational policies, admissions policies, scholarship and loan programs, and athletic and other school-administered programs.

Publicly accessible homepage. The homepage on which a school’s nondiscrimination policy is publicized must be “publicly accessible,” meaning that a visitor must be able to access the page without having to input a username and password. Further, the notice must be placed on the homepage in a manner in which it “is reasonably expected to be noticed by visitors.” Graphic considerations include the size, color and treatment of the notice in relation to other parts of the page. The guidance suggests considering whether: (1) the notice is unavoidable on the page; (2) other parts of the homepage distract attention from the notice; or (3) the notice is visible by simply scrolling through the homepage. “A link on the homepage to another page where the notice appears, or a notice that appears in a carousel or only by selecting a dropdown or by hover (mouseover) is not acceptable,” the revenue ruling states. 

Finally, a school that does not have its own website but has webpages within another entity’s website may fulfill the publication requirement by displaying its nondiscrimination policy “on its primary landing page within the website,” the guidance states.

Effective date. Revenue Procedure 2019-22 is effective as of May 28, 2019.

Implications

While Revenue Procedure 2019-22 provides a simplified method for a private school to fulfill the annual requirement of announcing its racial nondiscrimination policy, it is important that private schools understand the intricacies of the website posting alternative. In contrast to the annual publication requirement, the updated procedure requires the website posting be available at all times during the taxable year in a manner reasonably expected to be noticed by visitors to the homepage. The revenue procedure provides specific guidelines on how and where the policy is to be posted, including sample policy language. A private school may nonetheless continue to publish its policy through a newspaper or broadcast media rather than posting the policy to its website.

Please contact your Ernst & Young LLP professional for further information.

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