Trump administration asks IRS to revoke Harvard’s tax-exempt status
The Trump administration has asked the Internal Revenue Service’s top attorney to revoke Harvard University’s tax-exempt status, according to three people familiar with the situation, amid President Donald Trump’s row with the institution over its handling of antisemitism and diversity practices.
The directive is a significant escalation of the president’s feud with Ivy League institutions and other nonprofit groups his administration views as “woke,” according to the people, who requested anonymity because they were not authorized to speak about the topic.
Tax-exempt status is available to charitable, religious and educational organizations, as well as social welfare groups. But the organizations must adhere to tax laws that prohibit them from engaging in certain political activity. There is no proof that Harvard has violated any of those guardrails, experts say.
“The IRS is supposed to administer the tax rules impartially, not pursue political vendettas against exempt organizations,” said Steve Rosenthal, who served as senior fellow at the Tax Policy Center, a Washington-based think tank.
A representative from the Treasury Department did not immediately respond to a request for comment.
CNN first reported the Treasury Department’s request.
The authority to investigate and change tax-exempt statuses rests solely with the IRS, and the president is barred from directly or indirectly requesting that the agency exercise that power against taxpayers.
Andrew De Mello, the IRS’s acting chief counsel, received the request Wednesday from officials in the Treasury Department, the people said, and has yet to decide whether to implement it.
“It is dangerous for any administration to even contemplate politicizing the tax code,” said Natasha Sarin, a Biden administration Treasury official and president of Yale University’s Budget Lab. “It’s also illegal. We have protections in place in the code to make sure that the tax system isn’t weaponized by the executive branch, including the president, for political aims.”
Some Trump allies predicted that Harvard would only be the first of numerous colleges and universities that the administration would target over its tax-exempt status.
“I think they’re going to go after a whole bunch of them,” said Newt Gingrich, the former House GOP leader. “I’m not sure why we need to be funding people who aggressively refuse to give up a variety of values and structures that most Americans don’t agree with.”
Earlier this month, the Trump administration demanded broad control over Harvard’s operations over complaints about “diversity, equity and inclusion” policies in hiring, admissions and curriculums and student activism surrounding Israel’s war against Hamas.
Harvard rejected those demands on Monday, marking the first time a university formally countered the administration’s campaign for sweeping changes in higher education. Hours later, the administration responded by saying it would freeze more than $2 billion in federal funding.
Trump escalated the fight on Tuesday with a social media on Truth Social, “Perhaps Harvard should lose its Tax Exempt Status,” and falsely claimed the institution has supported terrorism.
Since taking office, the Trump administration has displaced numerous IRS leaders to empower political allies at the agency. De Mello took over as chief counsel in March after the Treasury Department demoted a career IRS attorney who was seen as blocking the administration’s attempt to use confidential tax data to search for undocumented immigrants, The Washington Post has reported. Numerous IRS attorneys warned the administration that the idea violated privacy laws.
Trump appointed Gary Shapley the agency’s acting commissioner after a series of rapid promotions.
Shapley told staff members in recent weeks that one of his first orders of business as an agency executive was to review and revoke the tax-free status of groups suggested by Republican allies in Congress, three of the people said.
Rep. Jason T. Smith (R-Mo.), chairman of the House Ways and Means Committee, has called on the IRS to strip tax-exempt status for groups that oppose Israel’s war against Hamas in Gaza, and for a Georgia political group aligned with Democratic causes and candidates.
False allegations of political vetting of nonprofit groups led the IRS into a financial tailspin as congressional lawmakers slashed its budget in retribution.
In 2013, IRS officials used political code words to scrutinize organizations that applied for tax-free status. Those trigger words included terms often used by right-wing or Tea Party causes. But a later investigation by the Treasury inspector general for tax administration found that process also ensnared liberal groups.
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• Praveena Somasundaram and Shannon Najmabadi contributed.