Schedule E is required for schools and centers around requirements for having a racially nondiscriminatory policy towards students and communicating this policy in brochures, catalogs, and other media about student admissions, programs, and scholarships.
The requirements referenced in Schedule E come from IRS Revenue Procedure 75.50. This revenue procedure describes the requirements for (a) the nondiscrimination policy and practices you need to have in place, and (b) recordkeeping to document that you’re compliant. The instructions to Schedule E (page 3 here) give an example of how you can word the nondiscrimination policy:
The (name) 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.
Revenue Procedures 75.50 also requires the following:
- You must include the nondiscrimination policy in your charter, bylaws, or other governing instrument, or in a resolution of your governing body (e.g. board of directors)
- You must include the policy in all the brochures, catalogs, and other media about your student admissions, programs, and scholarships.
- You must make the policy known to all parts of the community(ies) that you serve. You can satisfy this requirement by publishing notice of the policy in a newspaper of general circulation, or broadcast media, that will reach all racial segments of the community(ies) you serve. Review the instructions to Schedule E for the documentation to keep, showing that you met this requirement, as well as potential exemptions from the requirement.
- You must operate your facilities and programs in a racially nondiscriminatory manner.
- Scholarships, loans, and other financial assistance must be made available to students in a racially nondiscriminatory manner.
You’re also required to maintain certain records showing compliance with Revenue Procedure 75.50. You must keep these records for at least 3 years after compiling them. Per section 7.01 of the revenue procedure, this includes:
- Records indicating the racial composition of the student body, faculty, and administrative staff for each academic year.
- Records sufficient to document that scholarship and other financial assistance is awarded on a racially nondiscriminatory basis.
- Copies of all brochures, catalogs, and advertising dealing with student admissions, programs, and scholarships. Schools advertising nationally or in a large geographic segment or segments of the United States need only maintain a record sufficient to indicate when and in which publications their advertisements were placed.
- Copies of all materials used by or on behalf of the school to solicit contributions.