CNN = President Donald Trump says Harvard University will be stripped of its tax-exempt status, an extraordinary move amid a broader chess match over free speech, political ideology and federal funding at the Ivy League school and across American academia.
NBC News - The president suggested the Ivy League school should lose its tax-exempt status after it sued the Trump administration last week over its decision to freeze more than $2 billion in funding to the university.
NY Times - The I.R.S. determines which organizations meet the criteria for tax-exempt status. The agency has at times revoked tax-exempt status, including after audits that found political or commercial activities that violated the terms of eligibility.
In the past, the I.R.S. has challenged the tax exemptions of educational and other institutions under both Republican and Democratic administrations, according to Gowri Krishna, a professor at Fordham University School of Law who specializes in nonprofit law.
In one well-known example, Bob Jones University in South Carolina, a fundamentalist Christian institution that had banned interracial dating, lost its tax-exempt status over its discriminatory policies in a case that the Supreme Court ruled on in 1983. The university had claimed that the I.R.S. had violated its religious liberty. The university lifted the ban in 2000, and said in 2017 that it had regained its tax-exempt status.
But it is rare for the I.R.S. to revoke the tax-exempt status of an educational institution. Tax laws also provide organizations the right to appeal an adverse decision by the agency.
The agency says that it receives complaints claiming abuse of tax-exempt status every year from the public, members of Congress, state and federal government agencies and internal sources. But federal law bars the president or other senior officials of the executive branch from directly or indirectly requesting that the I.R.S. investigate or audit specific organizations. More
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