Trump Vows To Revoke Harvard’s Tax-Exempt Status, But Can He Do That
Trump Vows To Revoke Harvard’s Tax-Exempt Status, But Can He Do That?
President Trump vowed to revoke Harvard University’s tax-exempt status on Friday, more than a week after the school filed a federal lawsuit against his administration.
If the school's tax-exempt status is revoked — which is determined by the IRS, independent of the president — the university's income would be taxed, and donors would no longer receive tax deductions for their gifts. Most public and private universities are tax-exempted.
The Impact: "The tax exemption means that more of every dollar can go toward scholarships for students, lifesaving and life-enhancing medical research, and technological advancements that drive economic growth," the university said in a statement.
BEHIND TAX EXEMPTION
Last month, Trump said on Truth Social that Harvard should "be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting 'Sickness?'" — referring to the fact that tax-exempt organizations are banned from political activity.
But the tax code also prohibits the president and senior officials from directly or indirectly instructing the IRS to conduct or halt audits or investigations.
That being said, the president chooses the IRS commissioner. Right now, that's Michael Faulkender — the fourth acting IRS leader in the last four months.
HOW WE GOT HERE
Trump's attack on Harvard is the latest escalation in an ongoing fight between the president and the university, which began when Harvard became the first school to publicly refuse to comply with a list of government demands in April.
The administration then froze $2 billion in federal funding for the school.
The university sued in response, arguing that the administration violated its independence and constitutional rights by withholding funds in retaliation.
Dozens of faculty members have pledged to donate 10% of their salaries this year to help support the university’s legal fight, totaling an estimated $2.5 million — a drop in the bucket of the $2 billion pulled + billions more the administration says it is reviewing.
Historical context: Decades ago, the IRS revoked Bob Jones University’s tax-exempt status over its segregationist policies, including banning interracial dating. In 1983, the Supreme Court upheld the IRS’s decision, ruling that civil rights enforcement in education is a “fundamental national public policy.”
The Trump administration may attempt a similar legal argument to challenge Harvard’s tax status, claiming that antisemitism on campus and “DEI” policies violate civil rights protections.
