Politics
Trump Harvard tax-exempt status in Social Media Post, Raising IRS Concerns
Trump Harvard tax-exempt status
Legal experts warned NBC News that President Donald Trump would face consequences for his public threat to revoke Harvard University’s tax-exempt status.
Trump declared, “We are going to be taking away Harvard’s Tax Exempt Status,” in a Truth Social post on Friday. It is what they are due!
Trump can do whatever he wants with the IRS, but his social media statement about Harvard adds a potentially complicated element.
Regarding the IRS removing Harvard’s current tax status, Genevieve Lakier, a First Amendment specialist at the University of Chicago Law School, stated that “there is a way they could do this,” but “it can’t be at the behest of President Trump.”
Lakier referred to Trump’s social media post as “dumb” and “not helpful,” citing a statute that prevents the president and other public officials from ordering the IRS to look into taxpayers as a significant barrier.
The president has already threatened Harvard as part of his larger campaign against academic institutions that he feels oppose his objectives.
If Harvard continues to promote political, ideological, and terrorist-inspired or -supported “Sickness,” perhaps it should lose its tax-exempt status and be taxed as a political entity. Trump stated last month on Truth Social. “Keep in mind that achieving tax exemption status is entirely dependent on acting in the public interest,” he stressed.
Professor of tax law Edward McCaffery of the University of Southern California Gould School of Law concurred, saying that “the president’s politicization of this does not help.”
Harvard might use this to defend the action, saying that it “raises the question that he’s directing this” and that it is “about retribution” and “vengeance” rather than public policy.
According to Jeffrey Tenenbaum, a nonprofit organization lawyer in Washington, D.C., the IRS would have a “uphill climb” if it chose to pursue legal action against Harvard, one that may take years.
In a response following Trump’s comments, Harvard spokesperson Jason Newton stated that the university will oppose any move by the government to alter its standing. He said that removing the government’s “long-standing exemption from taxes to support universities’ educational mission” would “endanger our ability to carry out our educational mission.”
Newton stated that “the future of higher education in America would be severely impacted by the unlawful use of this instrument more generally.”
A request for comment from the White House was not answered.
Because of their tax-exempt status, organizations are able to avoid paying some taxes and allow their contributors to deduct donations from their taxes.
“Prohibition on executive branch influence over taxpayer audits and other investigations” is the title of the act Lakier cited.
“Any applicable person”—defined as the president, vice president, or any staff members of their offices—must not “directly or indirectly request any officer or employee of the Internal Revenue Service to conduct or terminate an audit or other investigation of any particular taxpayer with respect to the tax liability of such taxpayer,” according to the 1998 law.
“That’s intended for circumstances like this, where the president is attempting to exert influence,” Lakier stated.
What “he is clearly trying to do is intimidate Harvard,” which is already suing his administration for cutting off federal funding, she said, would be problematic if Trump claimed that he did not direct the action but rather that he announced something that was already happening independently of him.
Lakier stated that this is “still unconstitutional” and “reasonably looks like a threat.” The Supreme Court reaffirmed its stance last year in a case about a New York official’s effort to exert pressure on the National Rifle Association, saying that “the First Amendment clearly prohibits government officials from threatening to suppress speech,” she added.
“Six decades ago, this Court held that a government entity’s ‘threat of invoking legal sanctions and other means of coercion’ against a third party ‘to achieve the suppression’ of disfavored speech violates the First Amendment,” Justice Sonia Sotomayor wrote in a majority decision in that case. The Court reiterates its ruling from that time today: Public authorities cannot try to penalize or censor opinions that the government disagrees with by coercing private parties.
“I think this could happen, in the sense that the IRS could initiate moves and actions to take away Harvard’s status,” McCaffery said in response to a question on whether the IRS might revoke Harvard’s long-held status.
Bob Jones University, a private institution that forbade interracial dating on campus and refused admittance to those in interracial marriages, had previously been denied tax-exempt status by the IRS, he said. In 1983, the Supreme Court affirmed the agency’s ruling.
According to McCaffery, the case started as an inquiry in the 1970s under the Nixon administration and wasn’t concluded until the Reagan era.
The Jones case is “the current court standard for how this has to be done,” according to Tenenbaum.
It may take months or more than a year for the IRS to do an audit, or “examination,” of the organization. According to Tenenbaum, the business can effectively challenge that decision to the IRS if it determines that the institution’s status should be removed. The institution might contest that decision in the federal court system, where further appeals might be possible, but if it loses that appeal, its status would be terminated.
According to Tenenbaum, “the IRS can only revoke the tax-exempt status if the law is followed.” “A shortcut does not exist.”
According to McCaffery, any IRS action to remove the status would probably center on the administration’s allegations that the institution has a history of antisemitism and has failed to end its diversity, equity, and inclusion initiatives as required by the government.
He added that he is “skeptical” the agency would be able to do so, particularly if Trump continues to voice his opinions on social media, and that “they will have to convince the court that specifically what Harvard is doing is violating public policy” and “not political preference.”
“Glib allusions and giving the impression that the president and the board of trustees are at odds are not beneficial,” McCaffery stated. “Trump almost always undermines arguments his own administration would want to make in court when he begins to weigh in unilaterally.”