If the IRS rescinds the university’s tax-exempt status, the dispute will likely go to the courts.
Harvard University and the Trump administration are in an escalating standoff after the institution declined to comply with a list of conditions for addressing campus anti-Semitism and ending diversity, equity, and inclusion (DEI) programs.
The administration’s initial letter warned that $9 billion in grants and contracts would be reviewed. After some back-and-forth between the two sides, federal agencies announced April 14 that a quarter of that amount is now frozen due to the university’s inaction on the ultimatum.
Harvard President Alan Garber announced on April 14 that he would not surrender his school’s “independence or relinquish its constitutional rights.”
President Donald Trump posted on April 15 on Truth Social that perhaps Harvard should “be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting ‘Sickness?’”
“Remember, Tax Exempt status is totally contingent on acting in the PUBLIC INTEREST!”
In response to reports that the Internal Revenue Service (IRS) is looking to rescind Harvard’s tax-exempt status, White House deputy press secretary Harrison Fields told The Epoch Times that “investigations into any institution’s violations of its tax status were initiated prior to” Trump’s social media post.
He added that any IRS probe will be conducted independently of the president.
The Epoch Times reached out to the IRS for comment.
What is Tax-Exempt Status?
The Revenue Act of 1909 allowed nonprofits operating “exclusively for religious, charitable, or educational purposes” to be exempted from taxation.
The IRS is responsible for granting 501(c)(3) status, which exempts educational, religious, charitable, civic, and labor organizations from federal income and municipal property taxes, according to the federal agency.
Tax-exempt status also allows people to make tax-deductible contributions to those organizations.
The vast majority of higher learning institutions across the nation, whether public or private, are tax-exempt, which provides significant financial advantages over for-profit schools.
Revenues generated by tax-exempt organizations must go back into funding operations, not the hands of stakeholders or the institution’s leaders, as is the case with businesses or corporations.
Organizations with 501(c)(3) status are “absolutely prohibited” from publicly supporting or opposing candidates running for office, states the IRS, but certain other political activities are allowed on a limited basis, such as lobbying, voter education activities, or influencing legislation. Trump alleges that Harvard exceeded those limitations.
According to the Association of American Universities, tax-exempt schools must demonstrate compliance with state and federal regulations annually.
