Following Trump threats, IRS may revoke Harvard's tax-exempt status, reports say
The IRS may revoke Harvard University's tax-exempt status after the Ivy League university refused to meet President Donald Trump's wide-ranging demands for changes in its policies, CNN and the Washington Post reported on April 16.
According to the Post, the Trump administration asked the IRS to revoke the Cambridge, Massachusetts university's tax-exempt status. CNN reported that the agency is making plans to do so.
Trump and Harvard are battling over his allegations the university failed to adequately protect Jewish students during pro-Palestinian protests last year, along with his belief the university is a bastion of diversity, equity and inclusion programs. Republicans have for several years been discussing whether to revoke the tax-exempt status of Harvard and other universities they deem "woke" for DEI policies while permitting anti-Israel protests.
"Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting 'Sickness?'" Trump posted to Truth Social on April 15. "Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!"
The White House has already frozen $2.2 billion in grants and $60 million in contracts awarded to Harvard after it rejected demands to implement a mask ban, make changes to programs and departments that "fuel antisemitic harassment" and eliminate diversity, equity, and inclusion programs.
In a statement to Paste BN, Harvard spokesman Jason Newton called possible loss of tax exemption "unprecedented," and said the university's current tax status allows it to provide more money for students, researchers and technological advancements.
"There is no legal basis to rescind Harvard's tax-exempt status," Newton said. "The unlawful use of this instrument more broadly would have grave consequences for the future of higher education in America."
Founded in 1636, Harvard is the oldest university in the United States. Like most other universities, Harvard has long been exempt from paying federal income taxes on the grounds that it provides a public service. Harvard President Alan Garber said April 14 that the White House demand for outside scrutiny of Harvard programs "goes beyond the power of the federal government."
He added: "Freedom of thought and inquiry, along with the government’s longstanding commitment to respect and protect it, has enabled universities to contribute in vital ways to a free society and to healthier, more prosperous lives for people everywhere. All of us share a stake in safeguarding that freedom."
Harvard's endowment is about $53 billion, giving a significant financial cushion to fight the White House.
The Washington Post reported that the request to take away Harvard's tax-exempt status was conveyed by officials at the Treasury Department, of which the IRS is a part. Legal authority to change tax-exempt status belongs solely to the IRS and it is supposed to use that power without political favoritism. The president is not allowed to request that it do make changes to any taxpayers' status.
The personal-finance company Kiplinger said noted that one analysis said losing its tax-exempt status might cost Harvard $500 million annually. Legal experts say Harvard would inevitably appeal the loss of its tax-exempt status.
The move by the Trump administration reflect's the president's ongoing campaign against universities he argues have led the country leftward, spending too much time focusing on the failings of the United States and permitting protests by college students.
Trump has previously targeted Columbia University, which acceded to many of his demands, and has launched an investigation into 59 other universities on the grounds they have permitted antisemitism to flourish.
"Harvard has been hiring almost all woke, Radical Left, idiots and “birdbrains” who are only capable of teaching FAILURE to students and so-called “future leaders," Trump posted to Truth Social on April 16. "Harvard is a JOKE, teaches Hate and Stupidity, and should no longer receive Federal Funds."
Trump has named Gary Shapley as acting commissioner of the IRS. A former IRS criminal investigator, Shapley accused the Biden-era Justice Department of slowing the investigation into Hunter Biden.
In January, the chairman of the Republican-controlled House Ways and Means Committee, Rep. Jason Smith of Missouri, sent a letter to several universities, including Harvard, demanding they justify their tax-exempt status. He cited "ongoing concerns that ‘elite’ American universities are failing to provide instruction beneficial to individuals or the community and are instead instructing students to have disdain for the United States and the very communities they live in."
"Ultimately, as the U.S. House Committee with primary jurisdiction over tax-exempt institutions and the treatment of their endowments, we are left to wonder whether reexamining the current benefits and tax treatment afforded to your institutions is necessary," Smith wrote.
Contributing: Aysha Bagchi