Harvard University vs Trump: US IRS may revoke tax-exempt status, says report

The US Internal Revenue Service is planning to cancel Harvard University's tax-exempt status, with a final decision expected soon, CNN reported, citing two sources.

The report comes a day after Donald Trump threatened to revoke Harvard’s tax-exempt status and demanded an apology from the university for rejecting what it described as unlawful demands to change its academic programmes or risk losing federal funding.

The White House has frozen $2.2 billion in grants to Harvard University after it refused to comply with its demands related to campus protests.

In addition to the grants, the Donald Trump administration has reportedly halted $60 million in contracts with the university following its stance against curbing campus activism.

The Trump administration has also asked Harvard to enforce a strict mask ban, with serious and immediate penalties for violations, not less than suspension.

It has also demanded the university investigate and take disciplinary action for all violations that occurred during the 2023–2024 and 2024–2025 academic years.

Why did Harvard reject Trump’s demands?

Harvard President Alan Garber rejected the deal, saying that while some of the government’s demands are aimed at addressing antisemitism, most amount to direct government control over the university’s intellectual environment.

Alan Garber added that the university would not compromise its independence or give up its constitutional rights under the First Amendment, which protects free speech.

After the rejection, President Trump on Tuesday hit out at Harvard, saying the university should lose its tax-exempt status for promoting “political, ideological, and terrorist-inspired sickness.”

“Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting “Sickness?” Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!,” Trump wrote in a post on Truth Social.

Since his return to office, Donald Trump has sought to reshape leading universities by threatening to cut off federal funding, much of which supports research.

On Monday, Harvard became the first major US university to reject his administration's demands, accusing the White House of attempting to “control” its community.

David Armitage, a history professor at Harvard, told the BBC that the university could afford to push back given its status as the richest in the US, adding that no cost was too great for the sake of freedom.