Can the IRS revoke Harvard's tax-exempt status?

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Can the IRS revoke Harvard's tax-exempt status?

2025-04-19 03:30 Last Updated At：03:41

For more than a century, the majority of colleges and universities have not paid most taxes. The Revenue Act of 1909 excused nonprofits operating “exclusively for religious, charitable, or educational purposes” in order to continue acting in the public interest.

President Donald Trump is looking to challenge that designation, complaining that colleges and universities are “indoctrinating” their students with “radical left” ideas, rather than educating them. And he has decided to start with the 388-year-old Harvard University, one of the world's most prestigious institutions of learning and the first college founded in the American colonies.

On Tuesday, he targeted Harvard University in a post on his social media site, questioning whether it should remain tax-exempt “if it keeps pushing political, ideological, and terrorist inspired/supporting “Sickness?” Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!”

Tax-exempt status, which is decided by the Internal Revenue Service, means that these institutions do not pay certain kinds of taxes and that their donors receive a tax deduction when they make gifts. The rules they have to follow to maintain that status are set out in the tax code. We spoke with attorneys who specialize in nonprofit law and freedom of speech to try to answer questions about this challenge.

In general, no. Colleges and universities have broad leeway to design the education they provide.

Genevieve Lakier, a First Amendment scholar at the University of Chicago Law School, said the U.S. Supreme Court has laid out four essential freedoms for colleges and universities — what to teach, how to teach it, who their students are and who their professors are.

“That’s the irreducible core of academic freedom and it is constitutionally protected in this country,” she said, adding the government cannot threaten funding cuts or revoking a school's tax status as punishment for its views or what the school teaches.

The First Amendment also protects the rights of other nonprofits to pursue their charitable missions under freedom of assembly, Lakier said, even if those missions are odious or the government does not like them.

No, he is not supposed to, according to two nonprofit tax attorneys who wrote about a previous call from Trump to revoke the nonprofit status of colleges and universities.

In 1998, Congress passed a law that forbade federal officials from telling the IRS to investigate any taxpayer in an effort to increase trust in tax enforcement.

The attorneys, Ellen Aprill and Samuel Brunson, also pointed to legislation that forbade the IRS “from targeting individuals and organizations for ideological reasons,” after a controversy over how it treated Tea Party groups in 2013.

The IRS recognizes multiple reasons for a nonprofit to be exempt from paying many kinds of taxes, including pursuing charitable, religious or educational missions. The statute specifically names sports competitions, preventing cruelty to children or animals and defending human or civil rights as exempt purposes.

Nonprofits can lose their tax-exempt status for things like improperly paying its directors, endorsing a political candidate or operating a business unrelated to its charitable mission.

In short, tax attorneys say nonprofits must operate “exclusively for charitable purposes,” which is a different standard than what the president referred to as, “acting in the public interest.”

Phil Hackney, a law professor at the University of Pittsburgh, said, “Long history and precedent suggest that Harvard and institutions of higher education are operating for educational purposes, which are considered charitable," under the tax code.

He said it would be exceedingly difficult to make a case that a college or university was not operating for charitable purposes under current law. However, Edward McCaffery, who teaches tax policy at the University of Southern California Gould School of Law, warned there is precedent for the IRS revoking the tax-exempt status of colleges that the government could lean on.

“I think to dismiss it out of hand as over-the-top bluster and that the administration has no power to unilaterally pursue it, I think that’s naive," McCaffery said. "This could happen.”

Yes. In 1983, the Supreme Court upheld a lower court decision that the IRS could deny tax-exempt status to Bob Jones University, a private Christian university that banned interracial dating and marriage on campus, and Goldsboro Christian Schools, which employed racially discriminatory admissions policies.

The court found the IRS had some discretion to determine whether an organization seeking tax-exempt status met standards of “charity,” meaning that it “must serve a public purpose and not be contrary to established public policy.”

Nonetheless, McCaffery said, “The ability of the IRS just to come in and deny tax exemption, it better be a very clear, long-standing, deeply held public policy, and not political preferences for certain kinds of positions, attitudes and voting patterns.”

Usually, the IRS would open an audit, where it gathers evidence that a nonprofit is not operating exclusively for charitable purposes.

“The IRS would have to send to Harvard a proposed revocation of its status,” Hackney said. “At that point, Harvard would have many different means to talk with the IRS about why they believed they were within the law,” including suing.

However, Hackney said the U.S. Department of Treasury could implement new regulations, for example, stating that operating a diversity, equity and inclusion program is not consistent with charitable purposes. Such a change would usually take years to make and would run counter to decades of precedent, Hackney said.

“I am skeptical this effort will be successful,” he said. “If it were, this would be the most dramatic change of charitable law in my lifetime and I would say in the history of our charitable law.”

This story has been updated to reflect that Harvard University is 388 years old. A previous version stated it is 488 years old.

Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

The Golden Globes are tonight. Here's what to look for and how to watch and stream the show

The Golden Globes bill themselves as Hollywood’s booziest bash. This year, is anyone ready to party?

Political tension and industrywide uncertainty are the prevailing moods heading into Sunday night's 83rd Golden Globes. Hollywood is coming off a disappointing box-office year and now anxiously awaits the fate of one of its most storied studios, Warner Bros.

A celebratory mood might be even more elusive given that the wide majority of the performers and filmmakers congregating at the Beverly Hilton in Beverly Hills, California, oppose the policies of President Donald Trump. Likely to be on the minds of many attendees: the recent U.S. involvement in Venezuela and the fatal shooting of 37-year-old mother Renee Good in Minneapolis by Immigration and Customs Enforcement.

But through their ups and downs, the Globes have always tried to put pomp over politics. Host Nikki Glaser has vowed as much.

“You’d be surprised that half the room had no clue why I was saying ‘Venezuela,’” Glaser told The Associated Press earlier in the week, referring to her comedy-club warm-ups. “People aren’t getting the news like we all are.”

Glaser, a comic known for her roast appearances, has promised to go after A-listers in her second time hosting.

“We’re going to hit Leo,” Glaser said. “The icebergs are coming.”

Here’s what to look for at this year’s Globes:

The Golden Globes kick off at 8 p.m. EST on CBS while streaming live for Paramount+ premium subscribers. E!’s red carpet coverage begins at 6 p.m. EST.

The Associated Press will be have a livestream show beginning at 4:30 p.m. Eastern with a mix of stars' arrivals, fashion shots and celebrity interviews. It will be available on YouTube and APNews.

The overwhelming Oscar favorite “One Battle After Another” comes in with a leading nine nominations. It’s competing in the Globes’ musical or comedy category, which means the drama side might be more competitive. There, Ryan Coogler’s “Sinners,” Chloé Zhao’s “Hamnet” and Joachim Trier’s “Sentimental Value” are all in the mix.

But thus far, “One Battle After Another” has cleaned up just about everywhere. Much of Paul Thomas Anderson’s cast is nominated, including DiCaprio, Teyana Taylor, Sean Penn, Chase Infiniti and Benicio Del Toro.

If it and “Sinners” take home the two biggest prizes, it will be a banner night for Warner Bros. even as its future hangs in the balance. The studio has agreed to be acquired by Netflix is a deal worth $82.7 billion. Movie theaters have warned such a result would be “a direct and irreversible negative impact on movie theaters around the world.”

The merger awaits regulatory approval, while Paramount Skydance is still trying to convince Warner shareholders to accept its rival offer.

After an audacious promotional tour for “Marty Supreme,” Timothée Chalamet is poised to win his first Globe in five nominations. In best actor, comedy or musical, he’ll have to beat DiCaprio, a three-time Globe winner, and Ethan Hawke (“Blue Moon”).

In best actress, comedy or musical, Rose Byrne is the favorite for her performance in the not especially funny A24 indie “If I Had Legs I’d Kick You.” One prominent nominee in the category, Cynthia Erivo (“Wicked: For Good”), won’t be attending due to her schedule in the West End production “Dracula.”

Jessie Buckley (“Hamnet”) is the clear front-runner in best actress, drama. In the star-studded best actor, drama, category, the Brazilian actor Wagner Moura (“The Secret Agent”) may win over Michael B. Jordan (“Sinners”) and Joel Edgerton (“Train Dreams”).

In the supporting categories, Teyana Taylor and Stellan Skarsgård come in the favorites.

The Globes, formerly presented by the Hollywood Foreign Press Association, have no overlap or direct correlation with the Academy Awards. After being sold in 2023 to Todd Boehly’s Eldridge Industries and Dick Clark Productions, a part of Penske Media, the Globes are voted on by around 400 people. The Oscars are voted on by more than 10,500 professionals.

But in the fluctuating undulations of awards season, a good speech at the Globes can really boost an Oscar campaign. Last year, that seemed to be the case for Demi Moore, who won for “The Substance” and gave the night's most emotional speech. Mikey Madison (“Anora”), however, scored the upset win at the Oscars.

A few potentially good moments this year went instead in a Golden Eve ceremony earlier this week. There, the Cecil B. DeMille and Carol Burnett honorees, Helen Mirren and Sarah Jessica Parker, accepted their awards.

One to watch, if he wins, will be the Iranian director Jafar Panahi. His revenge drama “It Was Just an Accident” is up for four awards. Panahi has spent most of his career making films clandestinely, without approval of authorities, and was until recently banned from leaving the country. Last month, he was sentenced to a year in prison, which would be only his latest stint behind bars if Panahi returns home to serve it. This week, protests over Iran’s ailing economy have spread throughout the country in a new test to Iran's leaders.

For the first time, the Globes are trotting out a new podcast category. The nominees are: “Armchair Expert,” “Call Her Daddy,” “Good Hang With Amy Poehler,” “The Mel Robbins Podcast,” “SmartLess” and “Up First.”

In TV, HBO Max’s “The White Lotus” — another potential big winner for Warner Bros. — leads with six nominations. Netflix’s “Adolescence” comes in with five nods.

But the most closely watched nominee might be “The Studio.” The first season of Seth Rogen’s Hollywood satire memorably included an episode devoted to drama around a night at the Globes. (Sample line: “I remember when the red carpet of the Golden Globes actually stood for something.”) “The Studio” is up for three awards, giving three chances for life to imitate art.

For more coverage of this year’s Golden Globe Awards, visit: https://apnews.com/hub/golden-globe-awards