Harvard University, the oldest and richest higher education institution in the United States, has caught the Internal Revenue Service (IRS)’s ire. Should these allegations prove true, the revocation of its 501(c)(3) tax-exempt status should be considered. This decision comes in the wake of attacks from former President Donald Trump, who called the university out and charged the school with promoting antisemitism. The lost tax-exempt status would have catastrophic implications for Harvard, likely costing the prestigious institution billions of dollars.
As a first mate of the Ivy League, Harvard has reaped unparalleled privileges. These public benefits flow from its status as a charitable organization exempt from federal income taxes. Trump has repeatedly described the school as a “disgrace” and said its tax-exempt status should be reconsidered. He stated, “Tax exempt status, I mean, it’s a privilege. It’s really a privilege, and it’s been abused by a lot more than Harvard.”
Neither the IRS nor the U.S. government has produced a shred of evidence to support their accusation against Harvard. As such, the allegations are still unproven and certainly fail to warrant such a severe step. A spokesperson for Harvard, Jason Newton, emphasized this point: “There is no legal basis to rescind Harvard’s tax-exempt status.”
The university emphatically rejects every accusation of antisemitism. It clearly claims that it will not succumb to any pressure from Trump related to its day-to-day operations or regulatory agenda. Harvard’s administration has insisted that it is still deeply committed to this academic freedom and integrity at the core of its mission. Stanford University and many other academic institutions have united in support of Harvard. They add to that about the importance of protecting academic freedom pointedly crucial.
Yet the U.S. Department of Education has recently moved to freeze $2.3 billion in federal funds that had been already earmarked for Harvard. This move would have serious tax consequences. Alternatively, if the IRS were to revoke the university’s tax-exempt status, that would severely impact funding. Donors would be adversely affected since they would no longer be able to receive federal tax deductions when donating to Harvard. In addition, the university would be subject to taxes on unrelated business income derived from its large endowment’s investments.
Harrison Fields, a White House spokesperson, clarified that any actions by the IRS would be conducted independently of presidential influence. “Any forthcoming actions by the IRS will be conducted independently of the president, and investigations into any institution’s violations of its tax status were initiated prior to the president’s TRUTH.”