Trump’s Bold Attack on Harvard’s Tax-Exempt Status: What It Means for the IRS and You

President Donald Trump recently hinted at revoking Harvard University’s tax-exempt status in a post on Truth Social. This statement has raised eyebrows among legal experts.

While Trump claims this action is warranted, experts caution that it could be legally problematic. Genevieve Lakier, a First Amendment expert at the University of Chicago Law School, explained that although the IRS has the power to change tax statuses, it cannot do so at the president’s request. She described Trump’s comments as “not helpful” and pointed to a law that prevents executive influence over IRS investigations. This law aims to ensure that audits proceed objectively, without political pressure.

Harvard has faced similar threats from Trump before. In a previous post, he suggested that the university should lose its tax-exempt status for perceived political bias. Edward McCaffery, a tax law professor at USC, agrees that politicizing this issue doesn’t help the administration’s case. He argues that it could complicate the IRS’s efforts if they choose to pursue this action, which would likely be seen as retaliatory.

The revocation process itself would be lengthy and complex. Jeffrey Tenenbaum, an attorney specializing in nonprofit law, noted that if the IRS were to act, it would initiate an extensive audit, possibly taking years. Harvard already stated it would vigorously defend its status.

Tax-exempt institutions can forgo various taxes, and their donors often receive tax deductions. This exemption supports their educational mission. Lakier warns that Trump’s threats might intimidate Harvard, especially as the university is already challenging federal funding cuts.

Historically, there are precedents for IRS audits leading to revoked statuses. For instance, the IRS denied tax-exempt status to Bob Jones University due to its discriminatory policies, a decision upheld by the Supreme Court in 1983. This process involved an investigation that stretched across multiple administrations.

Current commentary also reflects a broader concern about the future of higher education in America. Harvard spokesperson Jason Newton emphasized that any changes to its tax status could threaten its educational mission, which is supported by longstanding federal policies.

In summary, while Trump’s threats against Harvard resonate in the political arena, experts suggest that such actions could face significant legal challenges. The road ahead remains fraught with complications, highlighting the delicate balance between politics and education.

For more information on IRS regulations, you can visit Cornell Law’s site.

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