The U.S. Supreme Court case Bob Jones University v. Simon, Secretary of the Treasury, et al., 1973 revolved around whether or not a private university could maintain its tax-exempt status while practicing racial discrimination in admissions policies. The Internal Revenue Service (IRS) had revoked the tax-exempt status of Bob Jones University because it did not meet their criteria for charitable organizations due to its racially discriminatory practices. In response, the university sued arguing that this action violated their First Amendment rights to religious freedom as they claimed that their policy was based on sincerely held religious beliefs. However, the court ruled against Bob Jones University stating that any organization seeking tax-exempt status must serve a public purpose and not violate fundamental public policy. It concluded that combating racial discrimination is such a fundamental public policy and thus an institution engaging in such practices cannot be seen as serving a public purpose deserving of special tax considerations.

In the dissenting opinion for Bob Jones University v. Simon, Secretary of the Treasury et al., 1973, it was argued that the court's decision to deny tax-exempt status to private schools with racially discriminatory policies overstepped its authority and infringed upon legislative power. The dissenters believed that such a significant policy change should be made by Congress rather than through judicial interpretation. They also expressed concern about potential First Amendment violations related to religious freedom, as many of these institutions were faith-based and their discriminatory practices were rooted in religious beliefs. Furthermore, they questioned whether this ruling could lead to other organizations losing their tax-exempt status based on subjective determinations of "public interest." Ultimately, while acknowledging the moral issues surrounding racial discrimination, they felt this decision represented an inappropriate use of judicial power.