Trump Orders Harvard’s Tax-Exempt Status Revoked

Constitutional crisis looms as president escalates unprecedented battle with elite university

President Donald Trump announced Friday that his administration is revoking Harvard University’s tax-exempt status, a dramatic escalation in the ongoing standoff between the White House and America’s oldest university. The president’s declaration, delivered through a terse Truth Social post stating “We are going to be taking away Harvard’s Tax Exempt Status. It’s what they deserve!” marks an extraordinary intervention that experts warn could trigger a constitutional showdown.

The unprecedented move follows Harvard’s refusal to comply with a series of White House demands regarding campus policies, including the elimination of diversity programs and changes to hiring practices. Harvard previously sued the administration after it froze more than $2.2 billion in federal research funding to the institution last month.

Legal Experts Question Presidential Authority

Constitutional scholars and tax law experts immediately questioned the legality of Trump’s directive, noting federal law explicitly prohibits presidents from ordering IRS investigations or audits of specific taxpayers. The 1998 law creating this firewall, passed with overwhelming bipartisan support, was designed specifically to prevent political weaponization of the tax agency.

“Trump just effectively signed a statement that he is committing a crime, violating a criminal statute enacted with overwhelming bipartisan majorities,” noted Lily Batchelder, a law professor at NYU Law, in an email to the Boston Globe. Past presidents who attempted similar actions, including Richard Nixon’s efforts to target political opponents with tax audits, faced significant legal and political backlash.

Sam Brunson, a tax law professor at Loyola University Chicago, explained that if Trump instructed the IRS to remove Harvard’s tax exemption, “that runs exactly contrary to law,” emphasizing the clear prohibition against presidential interference in tax matters. The case will likely end up before the Supreme Court if the IRS proceeds with the revocation.

Historical Precedent Raises Questions

Tax-exempt revocation for educational institutions is extremely rare, with the most notable case being Bob Jones University in the 1970s. In that instance, the Supreme Court upheld the IRS’s decision to revoke the school’s tax-exempt status because it banned interracial dating and marriage among students, ruling such policies violated fundamental national public policy against racial discrimination.

Experts question whether the Harvard situation provides comparable grounds. The University has maintained that the administration’s claims about antisemitism on campus do not reflect official institutional policies. Mark Goldfeder, director of the National Jewish Advocacy Center, argues, “Just like you can’t discriminate against Black people as they did in Bob Jones, you can’t discriminate against Jewish people as they’re doing here.”

However, others note crucial differences between the cases. Larry Zelenak, a law professor at Duke University, believes the Bob Jones precedent would only apply “if the IRS was taking the position that antisemitism was an official policy of [Harvard] in the way that racial discrimination was an official policy of Bob Jones… And I just don’t see the comparison there.”

Financial Implications Could Be Devastating

The potential financial impact on Harvard could be enormous if the revocation survives legal challenges. The university’s $53.2 billion endowment would face significant tax liabilities, while donors would lose tax deductions for contributions, potentially reducing philanthropic support.

According to a financial analysis by Slate, even if Harvard could deduct its operating expenses, it would still owe approximately $525 million annually in federal income taxes. This estimate doesn’t include additional consequences like the loss of tax-exempt bond financing and potentially reduced donations.

Harvard has warned that revocation would harm its educational mission. A Harvard spokesperson told Fox News that the tax exemption enables “more of every dollar [to] go toward scholarships for students, lifesaving and life-enhancing medical research, and technological advancements that drive economic growth.” The university provided $749 million in financial aid during fiscal year 2024.

Senate Democrats Demand Investigation

Senate Democrats, led by Minority Leader Chuck Schumer, swiftly responded by requesting a Treasury Department Inspector General investigation into potential illegal political pressure on the IRS. Their letter to Acting Inspector General Heather Hill called the action “illegal and unconstitutional – not to mention immoral” and warned it could set a dangerous precedent for other tax-exempt entities.

The senators specifically requested an investigation into whether Trump or administration officials directed or pressured the IRS to take politically motivated actions against the president’s perceived opponents. They expressed concern that while Harvard has resources to fight back, smaller organizations “are too small to resist pressure from the White House or do not have the resources for legal action,” making them vulnerable to similar tactics.

Organizations including the Foundation for Individual Rights and Expression have also raised alarms, warning that “threatening to strip a university of its tax-exempt status based on its expression — or that of faculty, staff, or students — sets a dangerous precedent” that could threaten all nonprofit institutions.