The Trump administration has formally asked the Internal Revenue Service (IRS) to initiate a process to consider revoking Harvard University’s tax-exempt status under Section 501(c)(3) of the Internal Revenue Code, escalating a high-profile dispute with the Ivy League institution. The request follows Harvard’s refusal to comply with administration demands to overhaul its hiring, admissions, and academic policies, prompted by student criticism of Israel.

On April 15, 2025, President Donald Trump signaled the move in a Truth Social post:

“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!”

The next day, Treasury Department officials directed the IRS to review Harvard’s status, sources familiar with the matter told The Wall Street Journal.

The standoff escalated after Harvard rejected a White House letter, sent the previous week, demanding “merit-based” hiring and admissions, the elimination of diversity, equity, and inclusion (DEI) programs, and an external audit for antisemitism. On April 14, 2025, Harvard President Alan Garber responded in a letter on the university’s website, stating, “The proposal ‘makes clear the intention is not to work with us to address antisemitism in a cooperative and constructive manner,’” adding that the demands “represent direct governmental regulation of the ‘intellectual conditions’ at Harvard” and are “unprecedented ‘assertions of power, unmoored from the law’” that violate free speech and the Civil Rights Act.

The administration also halted federal funding to Harvard, with reports estimating $2.2 billion in grants and $60 million in contracts affected, though exact figures remain unconfirmed. White House press secretary Karoline Leavitt said on April 15, 2025, that Trump “wants to see Harvard apologize” for “antisemitism that took place on their college campus against Jewish American students,” citing protests from the prior year.

The IRS has not commented on whether it will act, and Treasury Department spokespersons declined to respond, per The New York Times. If pursued, Harvard would be notified and could appeal any decision through federal courts. Revoking 501(c)(3) status requires evidence of prohibited activities, such as political campaigning or operating against public interest, as seen in Bob Jones University v. United States (1983), where the Supreme Court upheld revocation for discriminatory policies. Kiplinger notes, “only the IRS can revoke Harvard’s status, and it can’t be done simply by presidential fiat,” predicting a lengthy legal battle given Harvard’s $50.7 billion endowment.

The financial impact of losing tax-exempt status could be substantial, with estimates suggesting hundreds of millions in annual taxes on endowment income, though precise figures are unavailable. Harvard has paused hiring and issued $1.2 billion in bonds to bolster its finances, according to reports.

The move has divided observers. Ted Mitchell, president of the American Council on Education, told NPR that Harvard’s stance “paved the way for other institutions to oppose the administration’s demands.” Critics warn that using tax status as a political tool risks executive overreach, while supporters argue it holds universities accountable. The dispute underscores tensions between the administration and higher education, with potential implications for academic autonomy.