Trump administration goes scorched-earth by targeting Harvard’s tax-exempt status

Harvard University’s bottom line took a major hit earlier this week with the loss of billions in federal research grants, but it turns out the Trump administration was just getting started.

The administration has targeted Harvard’s tax-exempt status and ability to enroll foreign students, shaking the financial foundation of the nation’s oldest university amid an ongoing showdown over campus antisemitism and ideological extremism.

The Justice Department asked the Internal Revenue Service to revoke Harvard’s status as a 501(c)3 nonprofit organization, as first reported by CNN and confirmed Thursday by the Department of Government Efficiency.

“President Trump’s DOJ has formally requested that the IRS revoke Harvard University’s tax-exempt status,” DOGE said in a post on X.

Meanwhile, Department of Homeland Security Secretary Kristi Noem demanded that Harvard provide details about the “illegal and violent activities” of foreign-student visa holders by April 30, or face the loss of its certification in the Student and Exchange Visitor Program.

International students represent about 27% of Harvard’s total enrollment, according to university figures.

DHS also pulled $2.7 million in research grants from Harvard, calling the university “unfit to be trusted with taxpayer dollars.”

“Harvard bending the knee to antisemitism — driven by its spineless leadership — fuels a cesspool of extremist riots and threatens our national security,” Ms. Noem said in a late Wednesday press release. “With anti-American, pro-Hamas ideology poisoning its campus and classrooms, Harvard’s position as a top institution of higher learning is a distant memory. America demands more from universities entrusted with taxpayer dollars.”

The onslaught comes after Harvard rejected demands made in an April 11 letter from the Joint Task Force to Combat Anti-Semitism, a list that included ending DEI and other programs that “fuel antisemitic harassment”; increasing viewpoint diversity; and implementing merit-based hiring and admissions.

Harvard President Alan Garber said in an April 14 statement that “we will not accept their proposed agreement,” prompting the joint task force to freeze $2.2 billion in multi-year federal grants and $60 million in contracts.

More significant than the loss of federal contracts is the threat to Harvard’s tax-exempt status, an enormous financial boon that excuses the university from federal income taxes and allows donors to deduct contributions to the school from their tax obligations.

President Trump put the university’s nonprofit status into play on Tax Day by accusing Harvard of crossing the line into political activism.

“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?’” Mr. Trump said on Truth Social. “Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!”

President Trump’s DOJ has formally requested that the IRS revoke Harvard University’s tax-exempt status.pic.twitter.com/eXMuJlUTn3

— Department of Government Efficiency News (@DOGE__news) April 17, 2025

A Harvard spokesperson warned Thursday that rescinding the university’s tax-exempt status would pull funding from student scholarships, medical research and technological advancements.

“Such an unprecedented action would endanger our ability to carry out our educational mission,” the spokesperson told The Washington Times. “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.”

Most universities enjoy tax-exempt status – the exceptions include for-profit institutions like DeVry University – but the IRS may rescind nonprofit status for violations of federal law that include racial discrimination, said John Yoo, professor at the University of California Berkeley School of Law.

Harvard’s embrace of DEI programs and failure to stop antisemitism constitute such discrimination, illegal under federal civil-rights laws from the 1960s.

“The federal government and the Trump administration are on solid ground when they demand that Harvard not allow antisemitism to occur, not allow attacks on Jewish students, and to end the use of DEI programs that act as a proxy to conceal race conscious hiring and admissions programs,” Mr. Yoo told Fox News Channel in a Thursday interview.

He noted that the Supreme Court dinged Harvard for racial discrimination in 2023 with its decision in Students for Fair Admissions v. Harvard, which found that the university discriminated unlawfully against Asian applicants.

The administration may have the right to revoke Harvard’s nonprofit status, but whether it should do so has already spurred fierce debate.

Democrats accused the Trump administration of seeking to weaponize the IRS, prompting Trump supporters to issue an irony alert, given how the agency was wielded against conservatives under the Obama and Biden administrations.

Former Harvard President Lawrence Summers said Thursday that Treasury Secretary Scott Bessent should resign rather than be “complicit in the weaponization of the IRS against a political adversary of the President.”

“Harvard will endure and it is far, far from perfect, but if this directive is not withdrawn, the Administration will have taken another substantial step away from the rule of law and democracy,” Mr. Summers wrote on X.

Manhattan Institute Senior Fellow Christopher Rufo responded by arguing that Harvard has violated the law with its history of discrimination.

“’The rule of law’ includes following the Civil Right Act,” Mr. Rufo said. “You thought that Harvard could discriminate, scapegoat, and segregate on the basis of race as long as it was against whites, Asians, and Jews. You were wrong — and now your hubris is causing consequences.”

George Washington University Law School Professor Jonathan Turley warned the administration against setting a precedent that could be wielded by a Democratic president against more conservative colleges.

Removing a university’s nonprofit status would raise its tax rate on its investments from 1.4% to 21%, he said, resulting in a “massive financial loss for many schools.”

With its $53 billion endowment, Harvard likely could withstand such a tax hit, but other colleges would have to curtail their research dramatically or even shut down.