Three years after the Supreme Court told American universities to stop sorting applicants by race, the sorting hasn’t stopped. It just got a new address.

On Sept. 16, Students for Fair Admissions filed a comment letter with the Treasury Department and the IRS, warning that “geographic location,” a factor Treasury listed as an acceptable race-neutral criterion in its proposed rule on tax-exempt private schools, has become the preferred hiding place for the discrimination the court outlawed in Students for Fair Admissions v. Harvard. I’ve spent decades advising fiduciaries on the gap between what a policy says on paper and what it actually does. This is a case study in that gap.