Trump Administration Moves to Revoke Harvard’s Tax-Exempt Status
President Donald Trump has ordered the Internal Revenue Service (IRS) to draft plans to strip Harvard University of its tax-exempt status, intensifying a high-stakes conflict with the institution. This directive follows Harvard’s refusal to comply with White House demands, which include terminating diversity, equity, and inclusion programs, banning masks at protests, expelling pro-Palestinian students, and fully cooperating with the Department of Homeland Security.
The move comes on the heels of the administration’s decision to freeze $2.3 billion in federal funding to the university, signaling a broader campaign against elite academic institutions accused of fostering antisemitism and leftist ideologies.
The IRS, led by acting commissioner Gary Shapley, holds the authority to revoke tax exemptions, though such actions are exceedingly rare. The last notable precedent occurred in the 1980s when Bob Jones University lost its tax-exempt status due to racially discriminatory policies, a decision upheld by the Supreme Court. Harvard’s tax-exempt status is estimated to save the university between $465 million and $528 million annually, making its potential loss a significant financial blow. However, with an endowment exceeding $51 billion, Harvard remains financially resilient.
Harvard has staunchly defended its autonomy, rejecting the administration’s demands as unconstitutional and asserting its right as a private institution to determine its own policies and academic practices. The university argues that these demands infringe upon its freedom to operate independently, framing them as politically motivated rather than grounded in legal or ethical concerns.
The Trump administration’s directive has garnered widespread support from those frustrated with ongoing issues on Harvard’s campus. Many back the move, citing incidents of building vandalism, disruptions to classes that affect paying students, and what they perceive as the university’s anti-white and anti-Asian bias in its policies and practices. Supporters view the administration’s actions as a necessary step to hold elite institutions accountable.
However, the directive raises significant legal questions. Federal law prohibits the president from directly ordering specific IRS investigations, casting doubt on the legality of Trump’s instruction. Furthermore, the IRS is undergoing substantial workforce reductions, with plans to cut staff by 40–50%, which could strain its capacity to execute such a complex and high-profile action. The agency’s independence in this matter remains under scrutiny.
As the IRS prepares its plans, the outcome remains uncertain. A final decision is pending, and the resolution will likely have far-reaching implications for Harvard, the Trump administration, and the broader landscape of higher education in the United States.