Can Trump or the IRS strip Harvard of its tax-exempt status? Here’s what to know.

The ongoing battle between President Trump and Harvard University has taken a new turn, with the IRS now contemplating the revocation of the Ivy League school’s tax-exempt status. While a final decision has not been reached yet, the IRS is considering this action following Mr. Trump’s recent remarks suggesting that Harvard could lose its tax exemption.

Harvard, like many other universities and colleges, holds tax-exempt status due to its educational mission. This designation exempts the institution from paying federal income taxes and allows for tax-deductible donations. However, the Trump administration’s recent demands for policy changes at Harvard, including auditing the student body and faculty for “viewpoint diversity,” have sparked a series of actions against the university.

The White House’s attempts to freeze $2.2 billion in grants for Harvard and threats to cut federal funding for other top universities are part of a broader effort to influence campus policies on student expression and academic programs.

While stripping an organization of its tax-exempt status is rare, experts believe that it would be unprecedented for a prestigious institution like Harvard to lose this designation. The IRS has the authority to revoke tax-exempt status for failure to meet tax requirements, but legal experts question whether Harvard’s actions warrant such a drastic measure.

Under current laws, the President cannot direct the IRS to remove an organization’s tax-exempt status, and any actions taken by the IRS must be conducted independently. Should the IRS decide to strip Harvard of its tax exemption, the university would have the opportunity to appeal the decision and challenge it in court.

Losing its tax-exempt status could have financial implications for Harvard, affecting its ability to receive tax-deductible donations and potentially impacting its endowment. However, the university could employ tax strategies to mitigate these effects.

In response to the threat of losing its tax-exempt status, Harvard has maintained that such a decision would be illegal and reiterated the importance of its tax exemption in supporting its educational mission.

As the situation unfolds, it remains to be seen how the IRS will proceed and how Harvard will navigate the potential consequences of losing its tax-exempt status. The university’s stance on the issue underscores the broader implications of this ongoing dispute between academia and the government.