Summary

In addition to the efforts that let public housing to become overcrowded and predominantly African American and the efforts that allowed white families move to the suburbs with the support of FHA insured mortgages, the federal government supported segregation through tax incentives granted by the Internal Revenue Service (IRS) and regulatory complicity of banks and insurance companies.

The IRS is obligated to not allow discriminatory organizations from having tax-exempt status. This was first realized in 1967 when they withdrew the tax-exempt status of a recreational facility that denied entry to African Americans. Yet, the IRS continued to grant tax-exempt status to private white academies, which were built across the south to avoid complying with the Brown v. Board of Education ruling, until 1970. In 1976, the Supreme Court heard a case filed against the IRS by Bob Jones University; the university lost their tax-exempt status for...