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By Khaleda Rahman and Shane Croucher
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President Donald Trump has said he is going to take away Harvard's tax-exempt status.
"We are going to be taking away Harvard's Tax Exempt Status," he wrote in a post on Truth Social on Friday. "It's what they deserve!"
Harvard spokesperson Jason Newton responded in a statement to Newsweek that there is "no legal basis" to rescind Harvard's tax-exempt status. "Such an unprecedented action would endanger our ability to carry out our educational mission," Newton said.
Read More on Politics
Newsweek contacted the White House, the U.S. Treasury and IRS for comment via email outside of normal office hours on Friday.
Why It Matters
The Trump administration and Harvard have been locked in a dispute over the governmet's demands on universities related to activism on campus, antisemitism and diversity.
Last month the Ivy League institution became the first to openly defy the administration's demands which Harvard said would apply to hiring, admissions and teaching practices.
What To Know
President Trump suggested in mid-April that Harvard could lose its tax-exempt status after it became the first major U.S. college to reject his administration's demands.
"The university will not surrender its independence or relinquish its constitutional rights. Neither Harvard nor any other private university can allow itself to be taken over by the federal government," Harvard's legal team wrote. "Accordingly, Harvard will not accept the government's terms as an agreement in principle."
Shortly afterwards, the White House announced a freeze of more than $2.2 billion in grants and contracts to Harvard. Harvard has sued to halt the funding freeze.
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Nonprofit status, required for donations to be tax deductible, is contingent on an organization following IRS rules about lobbying, political campaign activity, annual reporting obligations and other requirements.
"It's easy for a 501(c)(3) organization to maintain its tax exempt status—and can be just as easy to lose it," an IRS publication states.
Losing its tax-exempt status could cost Harvard billions of dollars.
Bloomberg last year estimated that Harvard losing its nonprofit would cost the university more than $465 million a year.
If Harvard loses its tax-exempt status, it could have to pay tax on earnings from its $53 billion endowment—the largest in the nation—and donors would no longer be able to receive tax deductions for their contributions.
Several universities have been singled out for funding cuts by the Trump administration. Columbia University, an early target, agreed to the administration's demands in a bid to get $400 million in federal funding restored.
What People Are Saying
Harvard Spokesperson Jason Newton said in a statement to Newsweek:"The government has long exempted universities from taxes in order to support their educational mission. The tax exemption means that more of every dollar can go toward scholarships for students, lifesaving and life-enhancing medical research, and technological advancements that drive economic growth. There is no legal basis to rescind Harvard's tax-exempt status.
"Such an unprecedented action would endanger our ability to carry out our educational mission. It would result in diminished financial aid for students, abandonment of critical medical research programs, and lost opportunities for innovation. The unlawful use of this instrument more broadly would have grave consequences for the future of higher education in America."
President Donald Trump wrote on Truth Social on April 15: "Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting 'Sickness?' "Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!"
White House spokesperson Harrison Fields told the Washington Post in an April 16 article the IRS that any investigation into Harvard's tax status would be independent.
"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," he said**,** referring to the president's April 15 social media post
Former Harvard president Larry Summers, who was Treasury secretary under former president Bill Clinton, wrote on X on April 17: "Any self-respecting Treasury Secretary would resign rather than have the Department be complicit in the weaponization of the IRS against a political adversary of the President."
What's Next
If Harvard does lose its tax-exempt status, the university is likely to fight the move in court.
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