Trump Renews Threat to Revoke Harvard’s Tax-Exempt Status

President Donald Trump on Friday repeated his threat to strip Harvard of its tax-free status, escalating the standoff with the first major college to challenge the administration’s efforts to limit campus activity.

“We will withdraw Harvard tax exemption status,” Trump wrote on his social media site Friday morning from Palm Beach, Florida, where he spent the weekend. “That’s what they deserve!”

The president questioned the fate of Harvard’s tax-exempt status — which is owned by the majority of U.S. colleges and universities — since the school refused to comply with administration demands for sweeping changes in government and leadership, admissions policy reviews, and oversight of how diversity is viewed on campus. This caused the administration to block more than $2 billion in federal grants to the Cambridge, Massachusetts, Foundation.

The Treasury Department instructed a senior official from the Internal Revenue Service to begin the process of revoking Harvard tax-exempt status shortly after a social media post that Trump responded to in mid-April, but the White House noted that the Harvard tax department’s audit began ahead of Trump’s public statements targeting the school.

The White House also said any IRS action would be carried out independently of the president. Federal tax law prohibits senior members of the executive branch from requiring an IRS employee to conduct or terminate an audit or investigation.

Economist Robert Kelchen, head of the Department of Educational Leadership and Policy Studies at the University of Tennessee, Knoxville, told GBH News that the move would have serious consequences for Harvard.

“When a company loses tax preference status, it has to pay income tax on any income or donated growth it has, and donors also have to pay taxes on any gifts because suddenly it’s not charitable contributions,” Kelchen said.

Harvard may also owe local estate taxes on its properties if the school loses its tax-free status. Kelchen said it is possible that Cambridge would waive that obligation, but doing so could put the city at risk of federal retaliation.

Democrats say Trump’s actions against Harvard are purely political. Senate Minority Leader Chuck Schumer, along with two Massachusetts Democratic senators, Elizabeth Warren and Ed Markey, and Senate Finance Committee Chairman Ron Wyden, chairman of the Oregon Finance Committee, have called for an investigation by the inspector general into Trump’s attempts to remove Harvard University from tax-exempt status.

The senators said Trump’s move “raises troubling constitutional questions, including whether the president is trying to silence free speech rights at Harvard and whether revoking his tax-free status would deprive the University of due process.”

Trump’s war against Harvard is part of a broader campaign the administration has framed as an attempt to root out anti-Semitism on college campuses. But the White House also sees a political advantage in the fighting, calling it a larger war against elite institutions condemned by loyal Trump supporters.

According to a 2024 Gallup poll, a growing number of Americans say they have little or no confidence in higher education. Many of these critics worry about colleges driving political agendas, the quality of education, and the high cost of attendance.

“These criticisms are not wrong. ” I think we were swinging a little bit on the waking side and we didn’t do enough in terms of cost and improve graduation rates,” Catherine Bond Hill, managing director of research firm Ithaka S+R and former president of Vassar College, told GBH News.

But he believes some policymakers and the public are ignoring how higher education makes our nation stronger.

“They do this through research, through groundbreaking research, but also through the education of undergraduate and graduate students who contribute to the human capital pool in our nation. “That’s what drives and continues to drive innovation and economic growth that makes us all better,” said Bond Hill.