Trump threatens Harvard’s tax-exempt status after university files lawsuit
Harvard sues Trump administration as the president escalates fight over federal funding and campus protests.
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| Demonstrators rally on Cambridge Common outside Harvard University in Cambridge, Massachusetts, on April 25, 2025, to protest the university’s position on the war in Gaza and express solidarity with the Palestinian people. Photo by Joseph Prezioso/AFP |
By Anna Fadiah and Hayu Andini
President Donald Trump has ignited a new controversy by threatening to revoke Harvard University’s tax-exempt status, days after the prestigious Ivy League school filed a lawsuit against his administration. The lawsuit challenges the government's decision to freeze billions of dollars in federal funding, citing violations of Harvard’s constitutional rights and threats to its academic independence.
“We are going to be taking away Harvard’s Tax Exempt Status. It’s what they deserve!” Trump declared in a post on Truth Social Friday morning, escalating his ongoing war with elite academic institutions.
The threat marks the latest and most aggressive move in what has become a broader campaign by Trump and his allies to exert greater control over universities, particularly in response to campus protests and diversity initiatives.
Harvard responds: Legal basis lacking for tax revocation
Harvard University swiftly pushed back, with a spokesperson stating that Trump’s threat lacked legal foundation.
“There is no lawful basis for the president or any political figure to revoke our tax-exempt status,” the spokesperson said. “Such an unprecedented action would endanger our ability to carry out our educational mission and set a dangerous precedent for academic institutions nationwide.”
Legal experts have also warned that targeting a specific university based on its opposition to government policy raises serious constitutional concerns. Any move by the Internal Revenue Service to revoke Harvard’s 501(c)(3) status would likely face immediate and sustained legal challenges.
Focus on campus protests and DEI policies
The Trump administration has accused several elite universities, including Harvard, of failing to protect Jewish students during last year’s pro-Palestinian protests. Trump has also criticized what he sees as the institutions’ overreach in promoting Diversity, Equity, and Inclusion (DEI) policies.
To that end, the administration has frozen grants and contracts to multiple universities, citing concerns over discrimination and failure to uphold federal civil rights standards. A government task force has been formed to investigate whether universities are in breach of their obligations.
Harvard’s lawsuit, filed late last month, argues that the funding freeze was politically motivated and violates the institution’s First and Fifth Amendment rights. The complaint highlights what it calls a deliberate effort by the Trump administration to punish dissent and chill free expression on campuses.
Legal and constitutional hurdles for Trump
Experts say that Trump’s threat to strip Harvard of its tax-exempt status over political disagreements breaches longstanding norms that separate political leaders from IRS enforcement actions.
Under current federal law, the president and senior officials are barred from directly or indirectly ordering the IRS to investigate or audit specific taxpayers. Doing so can be prosecuted as a crime, punishable by fines and imprisonment. However, enforcement would rely on federal prosecutors pursuing charges—something that could become politically and legally complex.
“It’s one thing to criticize Harvard. It’s another thing entirely to use the power of the IRS to punish them,” said Georgetown Law professor David Super. “If Trump were to succeed in influencing the IRS this way, it would amount to weaponizing the tax code for political revenge.”
It remains unclear whether Trump’s remarks were based on inside knowledge of an ongoing IRS investigation or simply a political statement.
Schumer calls for federal inquiry into Trump’s actions
In response to Trump’s remarks, Senate Minority Leader Chuck Schumer on Friday formally requested that the IRS inspector general investigate whether the president violated the law by attempting to influence agency enforcement.
Alongside fellow Senate Democrats Ron Wyden, Elizabeth Warren, and Ed Markey, Schumer warned in a letter that allowing Trump to interfere in IRS matters could undermine the legal protections of not just Harvard, but countless smaller organizations across the country.
“While auditing Harvard for refusing to capitulate to the president’s demands is clearly troubling, we are even more concerned about the implications for organizations that are too small to resist pressure from the White House,” the senators wrote.
They urged the inspector general to determine whether the IRS has begun any audits or investigations at the behest of the White House and whether any internal protocols were breached.
A history of IRS scrutiny and political abuse
The controversy echoes past scandals in which the IRS was accused of political bias. In the early 2010s, the agency faced criticism for scrutinizing conservative nonprofit groups applying for tax-exempt status. That episode led to congressional investigations and the resignation of senior IRS officials.
However, legal scholars argue that Trump’s current posture—publicly demanding IRS action against a political opponent—represents an even greater threat to institutional norms and the rule of law.
“This isn’t just about Harvard,” said tax law expert Daniel Hemel. “It’s about whether the president can use the IRS as a blunt political instrument.”
Harvard’s tax-exempt status and legal defense
Harvard, like other educational nonprofits, qualifies for 501(c)(3) tax-exempt status. This means the university is exempt from federal income tax and donors can deduct contributions from their own tax returns.
Such a status can be revoked only if the IRS determines that the institution no longer operates in line with its educational mission or violates public policy principles. In the past, the Supreme Court upheld the revocation of Bob Jones University’s tax-exempt status due to racially discriminatory policies—setting a high threshold for government action.
For the Trump administration to revoke Harvard’s status, it would need to argue that the university’s conduct violates fundamental public policy. Some administration officials have pointed to Harvard’s approach to antisemitism and its admissions policies as potential areas of concern, though such claims are likely to be contested in court.
Harvard has indicated that it is fully prepared to defend its legal status. “Any attempt to revoke our tax-exempt status will be met with immediate legal action,” said the university’s spokesperson. “We will not be intimidated.”
Broader implications for higher education
The feud between Trump and Harvard comes amid broader efforts by the president and his allies to reshape American higher education. From curriculum reforms to efforts to dismantle DEI initiatives, conservatives have increasingly targeted universities as hotbeds of liberal ideology and resistance.
Trump’s latest threat could embolden more political interventions in the academic sphere, according to observers. “This is not just an attack on Harvard—it’s a shot across the bow of all higher education institutions that dare to oppose government policy,” said Sarah Wilson, director of a nonprofit focused on academic freedom.
If Trump pursues the threat, the battle between Harvard and the federal government could mark a defining moment in the relationship between American universities and political power.
IRS remains silent
As of Friday evening, the Internal Revenue Service had not issued any public response to Trump’s remarks. It is unclear whether the agency has initiated or is considering an audit of Harvard University.
For now, the standoff between Trump and one of America’s oldest academic institutions continues to escalate, setting the stage for a prolonged legal and political confrontation with potentially far-reaching consequences.
