Revoking Harvard's Tax Exemption: A Complex and Protracted Process

In a bold move that could escalate tensions over federal funding, former President Trump floated the idea of stripping Harvard University of its tax-exempt status.

"Tax Exempt Status hinges entirely on serving the public's interest!" Trump posted as he criticized Harvard's alleged involvement with politics, ideology, and what he termed as 'terrorist-inspired activities.'

During a media briefing, Trump stated that the administration was still weighing options, indicating no final decision had been made. The IRS and the White House did not provide comments when requested by NPR earlier that week.

The administration's challenge could initiate an unusual reprisal against Harvard for its non-compliance with recent government mandates. However, it wouldn't be a complete outlier as precedence exists.

Historical Example: Bob Jones University

Bob Jones University, a Christian college in South Carolina, faced a revocation of its tax-exempt status by the IRS in 1976 due to racial discrimination policies.

The case escalated to the Supreme Court, questioning if their policy prohibiting interracial relationships was justified by religious freedoms, as the university claimed biblical support for the stance.

Ultimately, in 1983, the Supreme Court sided with the IRS, stipulating that racial discrimination conflicted with core national public policies.

Comparisons with Harvard

Legal scholars like Michael Graetz of Yale and Larry Zelenak of Duke speculate the administration might invoke the Bob Jones judgment in a potential bid against Harvard, specifically citing alleged inadequacies in protecting Jewish students.

Graetz underscores that Harvard's situation differs as the university does not institute policies of religious discrimination akin to Bob Jones' racial policies.

Potential Implications for Harvard

Michael Graetz notes that rescinding Harvard's tax status could impose immense financial burdens, affecting revenue streams from its $53.2 billion endowment and donor tax breaks.

Harvard could potentially see declining student financial aid, setbacks in medical research, and reduced innovation opportunities.

Political Influences over the IRS

Historically, presidents like Kennedy and Nixon utilized the IRS against adversaries, leading Congress in 1998 to reinforce the IRS's autonomy, prohibiting the executive branch from manipulating it against specific entities or individuals.

Graetz and NPR experts point out that such actions against Harvard could be seen as inappropriate governmental interference in the IRS's duties.

Zelenak believes Harvard would have robust legal defenses if these threats materialized, as IRS revocations require court validations following institutional challenges.