Harvard tax-free status: Trump hopes to divest Harvard’s tax-free status after freezing his funds. But is it possible?
Fox News reported that the Trump administration has formally asked the Internal Revenue Service (IRS) to revoke Harvard’s tax-free status on the grounds that the Ivy League’s alleged failure to address anti-Semitism on campus. The government believes that Harvard’s actions violate the conditions required to maintain its 501(c)(3) nonprofit status. CNN reported that the IRS is expected to make a final decision in the coming weeks.
“Perhaps Harvard should lose its tax-free status if it continues to push political, ideology and terrorist inspiration/support” disease? ”, then it should be taxed as a political entity. Remember that tax-free status depends entirely on acting in the public interest!” The US President said in his post on his Truth Social Platform.
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What is tax-free status?
According to the Guardian, the IRS is reportedly planning to revoke Harvard’s tax-free status, which could be an illegal move in a consistent attack on the independence of U.S. higher education institutions. The Trump administration has asked top lawyers at the Federal Taxation Agency IRS to revoke Harvard’s tax-free status.
Let’s first understand what tax-free status is. If an organization has tax-free status, it can prevent them from paying federal income tax if they serve an IRS-approved purpose. According to the Washington Post, according to the 501(c)(3) category, which includes charity, religion, education, science and similar activities. The IRS lists “education or scientific advancement” as a charity. Like many universities, Harvard enjoys tax-free status as an educational institution. It also does not pay state income tax in Massachusetts for the same reason.Also read: Did Trump’s funding freeze Harvard’s sabotage U.S. scientific leadership?
Now, the U.S. government has frozen $2.2 billion in grants and $60 million in Harvard contracts after universities refuse to comply with policy requirements for their policy changes. If Harvard loses tax-free status, it would be another major financial blow to the varsity team, which is already facing a multi-billion-dollar federal funding freeze. Loss waivers can lose millions of dollars per year.
Can Trump revoke Harvard’s tax-free status?
Trump believes that “the tax-free status depends entirely on acting in the public interest!” Universities, as well as many charities and religious groups, are exempt from federal income tax. However, if the group engages in political activities or get rid of the purpose of the statement, this valuable tax deduction can be eliminated.
Only the IRS operated under the U.S. Treasury Department has the right to investigate or revoke tax-exempt status. Federal law prohibits senior executive officers (including the president and vice president) from directing the IRS to initiate or stop audits or investigations of any individual or entity.
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Violations of this law could result in fines up to $5,000 and up to five years. According to CNN, the rule is outlined in the section titled “Injunctions on the Executive Impact of Taxpayer Audits and Other Investigations.”
Genevieve Lakier, a First Amendment scholar at the University of Chicago Law School, told ABC News that the U.S. Supreme Court laid four fundamental freedoms for colleges and universities — how to teach, how to teach, who their students are, who their professors are.
“It is an inseparable core of academic freedom, which is protected by the constitution in this country,” she said, adding that the government cannot threaten to cut funds or revoke the tax status of schools as a punishment for their views or what the schools teach.
An institution can only lose its tax exempt status under certain circumstances. For example, 501(c)(3) organizations are prohibited from participating in the political movement of public office. To make the IRS politically independent, the IRS had only two politically appointed officials.
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It has faced turmoil under the new Trump administration, with several acting commissioners reportedly resigning due to a stalemate on whether tax data can be shared with immigration officials.
The IRS was also involved in a major scandal during the Obama administration, and the agency delayed approval of tax-exempt status to conservative groups in the Treasury investigation.
The White House calls on the oldest universities in the United States to change recruitment, enrollment and teaching practices, which will help fight anti-Semitism on campus.
Since returning to the office, Trump has been reshaping top universities by threatening to withhold federal funds for major designated research. Harvard became the first major university in the United States to reject his administration’s request on Monday, accusing the White House of trying to “control” its communities.
