There are reports suggesting the IRS is considering revoking Harvard University’s tax-exempt status, shortly after former President Donald Trump publicly criticized the school — raising serious concerns about the politicization of the U.S. tax system.
While universities have lost or been denied tax-exempt status in the past, it’s rare — if not unheard of — for such action to follow a direct statement from a president. The IRS is meant to operate independently from political influence.
Federal law clearly restricts presidents from interfering with IRS operations, including audits or investigations. A specific statute, “Prohibition on executive branch influence over taxpayer audits and other investigations,” outlines this boundary to preserve the IRS's integrity.
Although the IRS is part of the Treasury Department, it functions best when insulated from politics. As Mark Mazur, a former assistant secretary for tax policy, pointed out, the agency has only two politically appointed roles — a safeguard designed to keep tax enforcement impartial.
Mazur also noted that Americans tend to voluntarily comply with tax laws more than citizens of many other countries. He credits this to a general sense that the system is fair and based on law rather than politics. Using the IRS as a political weapon could erode that trust.
This isn't an abstract fear. During the Obama years, the IRS faced intense criticism after it was revealed that conservative groups experienced delays in obtaining tax-exempt status — a scandal confirmed by a Treasury investigation.
If the IRS were to challenge Harvard’s tax-exempt designation, the university would be entitled to a formal warning and a chance to respond, including the right to take the matter to court.
The IRS has already seen instability during Trump’s return to office. Several acting commissioners have stepped down, reportedly due to internal conflicts about whether tax data could be shared with immigration agencies — a controversial move that sparked legal and ethical debates.
There is precedent for universities losing their tax-exempt status. In 1983, the Supreme Court upheld a decision against Bob Jones University due to its racially discriminatory policies, specifically a ban on interracial relationships. That policy remained in place until 2000 and the school didn’t regain tax-exempt status until 2017.
Today, Trump’s issue with Harvard centers around its commitment to diversity programs, which he has openly criticized.
Harvard is no ordinary university. With an endowment of over $50 billion and influence that stretches across both political parties — a significant number of members of Congress are alumni — it has the means to push back.
Still, like other research institutions, Harvard depends on federal support and tax exemptions to operate at its current scale.
After the university refused to comply with Trump’s demands to eliminate its diversity programs and provide access to employment and admissions records, the former president publicly stated that its tax-exempt status should be revoked.
The bigger question now looms: What happens if Harvard loses that exemption? Without it, the university could face billions in taxes — not just from the federal government, but possibly from the state of Massachusetts as well.
