As many as 18,000 institutions could be affected by proposed regulations the Treasury Department and the IRS announced last week. The rules would strip 501(c)(3) status from any private school, elementary through graduate, that “adopts, maintains, or enforces a policy or practice that discriminates on the basis of race, color, or national or ethnic origin.”

The legal principle is not new. In 1983, the Supreme Court held in Bob Jones University v. United States that private schools have no right to a federal tax subsidy for racial discrimination. Tax-exempt status under Section 501(c)(3), the court explained, requires an institution to serve the public interest and not violate “fundamental public policy.” Bob Jones University’s admissions practices and restrictions on interracial dating failed that test.