Published by Global Banking & Finance Review®
Posted on May 2, 2025
4 min readLast updated: January 24, 2026
Add as preferred source on GoogleTrump threatens Harvard's tax status, claiming ideological bias. Harvard argues it's unlawful, while Senate Democrats seek an IRS probe.
By Susan Heavey and Jonathan Allen
WASHINGTON (Reuters) -U.S. President Donald Trump said on Friday his administration will revoke Harvard University's tax-exempt status, returning to a threat he issued against the Massachusetts school last month as part of his wider attack on elite universities.
"We are going to be taking away Harvard's Tax Exempt Status. It's what they deserve!" Trump wrote in a post on his social media platform, without elaborating.
The university responded, saying that would be an unlawful misuse of the U.S. tax code, which makes it a crime for the president, vice president or any White House employee to request the Internal Revenue Service investigate or audit a particular individual or entity.
Harvard is already suing the Trump administration over the announcement last month that the government was freezing federal grants to the Ivy League university amounting to $2.2 billion, mostly to fund medical and other scientific research.
Trump previously said on April 15 that he thought Harvard should perhaps "lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting 'Sickness?'"
Soon after, White House spokesperson Harrison Fields said any forthcoming IRS actions were independent of the president and that any audit or investigations were initiated before Trump's post.
Representatives for the Internal Revenue Service did not respond to questions on Friday.
The tax code requires that any IRS employee who receives an improper request from the White House report that to the U.S. Treasury Inspector General for Tax Administration, whose office also did not respond to questions.
Harvard, the nation's oldest and wealthiest university, said a revocation of its tax-exempt status would be unlawful and unprecedented, a comment echoed by free-speech advocacy groups and other non-profit organizations on Friday.
"There is no legal basis to rescind Harvard's tax-exempt status," the Boston-area school said in a statement. "The unlawful use of this instrument more broadly would have grave consequences for the future of higher education in America."
It would also cut money available for student scholarships, medical research and technological advancements that drive economic growth, Harvard said.
Most universities, including Harvard, are exempt from federal income tax because they are deemed to be charitable organizations operated exclusively for public educational purposes. The exemption also allows people to make tax-deductible donations to such organizations, a valuable source of income for colleges with wealthy alumni.
Since a 2017 law, Harvard and other universities have had to pay a 1.4% excise tax on their endowments. Harvard's endowment amounted to $53.2 billion dollars as of the 2024 fiscal year, when it paid more than $44 million in taxes.
Senate Democratic leader Chuck Schumer and fellow Democratic U.S. senators on Friday asked Acting Inspector General Heather Hill at the Treasury to investigate any IRS actions being taken against Harvard.
Diane Yentel, president of the National Council of Nonprofits, said in a statement that Trump's actions are an abuse of executive power and "an existential threat to the entire nonprofit sector."
"If the Trump administration can silence universities today, who will be next?" Yentel said.
Since taking office in January, Trump has targeted U.S. universities by freezing federal funding, launching investigations, revoking international students' visas and making other demands.
Trump, a Republican, has said higher education has been gripped by antisemitic, anti-American, Marxist and radical left ideologies.
Trump's administration escalated its fight against Harvard in recent weeks by freezing federal grants, seeking details on its foreign ties and threatening its ability to enroll foreign students.
The grant freeze came after Harvard rejected and denounced what it called illegal demands made by the Trump administration, which included a demand to audit the viewpoints of its professors and students, seek outside auditors to review several of its departments, ban face masks and some diversity initiatives, and overhaul its governance.
(Reporting by Susan Heavey in Washington and Jonathan Allen in New York; additional reporting by Donna Bryson and Brendan O'Brien; Editing by Mark Potter, Nia Williams and Bill Berkrot)
The main topic is Trump's threat to revoke Harvard University's tax-exempt status.
Harvard claims the revocation of its tax-exempt status would be unlawful and unprecedented.
Trump has frozen federal funding, launched investigations, and threatened universities' tax statuses.
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