Harvard University signalled on Friday that it would resist President Trump’s renewed threat to revoke the school’s tax-exempt status, a move for which it said there was “no legal basis” as the president escalated his bitter dispute with the nation’s oldest university.
Harvard stopped short of explicitly pledging a legal challenge to a revocation of its tax status, a change that would upend the university’s finances. But a spokesperson for the university said in a statement that there was “no legal basis to rescind Harvard’s tax-exempt status.”
“Such an unprecedented action would endanger our ability to carry out our educational mission,” the statement said. “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.”
Trump declared on Friday morning on social media that the government would be “taking away Harvard’s tax exempt status.” Trump added, “It’s what they deserve.”
Despite Trump’s assertion online and Harvard’s sharp response, it was not immediately clear on Friday whether the IRS was in fact moving forward with revoking Harvard’s tax-exempt status, a change that could typically occur only after a lengthy process. Federal law prohibits the president from directing the IRS to conduct tax investigations, and IRS employees who receive such a command are required to report it to an internal government watchdog.
After Trump first publicly called for Harvard to lose its tax exemption, White House officials said that the IRS would make its own conclusion about whether to do so.
Representatives for the IRS and treasury department, which oversees the tax collector, did not respond to a request for comment.
With its tax-exempt status, Harvard not only does not have to pay most taxes, but donors can write off gifts to the school on their own tax returns. Losing the status would not only force Harvard to start paying tax to the federal government on its income but could cause donations to dry up. Philanthropy accounts for about 45 per cent of Harvard’s annual operating revenues; most of that sum comes from a payout from the university’s $53 billion endowment.
The intensifying standoff between the Trump administration and Harvard is part of a broad pressure campaign against some of the nation’s most elite universities, which the administration has painted as hotbeds of antisemitism and discrimination that require federal intervention.
In recent weeks, Harvard has taken a decidedly confrontational posture towards the Trump administration. The university rejected a roster of demands from the government, including that it submit reports to Washington, alter its admissions and hiring policies and bring in an outsider to examine “those programmes and departments that most fuel antisemitic harassment or reflect ideological capture.”
The university sued after the administration froze $2 billion in federal funds in retaliation for Harvard’s defiance.
New York Times News Service