President Donald Trump’s threat to strip Harvard University of its tax-exempt status could end up causing more trouble than he bargained for, according to legal experts who spoke with NBC News. In a recent post on Truth Social, Trump declared, “We are going to be taking away Harvard’s Tax Exempt Status. It’s what they deserve!” While the IRS does have the power to revoke Harvard’s tax-exempt status as Trump desires, his direct targeting of the university through social media adds a whole new layer of complexity to the situation. Genevieve Lakier, a First Amendment expert at the University of Chicago Law School, mentioned that there is a potential way for the IRS to remove Harvard’s tax-exempt status, but not if it’s at the request of President Trump. She criticized Trump’s post as “dumb” and “not helpful,” pointing out that a law prohibits government officials from instructing the IRS to investigate taxpayers, which poses a significant obstacle in this case. Trump has a history of going after Harvard and other educational institutions that he believes are not aligned with his agenda. In a previous post on Truth Social, he suggested that Harvard should lose its tax-exempt status and be taxed as a political entity if it continues to promote certain ideologies that he disagrees with. Edward McCaffery, a tax law professor at the University of Southern California Gould School of Law, agreed that Trump’s politicization of the issue could complicate matters, implying that the move may be more about revenge than public policy.
Jeffrey Tenenbaum, a Washington, D.C., attorney specializing in nonprofit organizations, expressed doubts about the IRS’s ability to effectively challenge Harvard’s tax-exempt status, noting that the process could drag on for years. In response to Trump’s post, a spokesperson for Harvard, Jason Newton, stated that the university would resist any attempts by the administration to alter its tax status, emphasizing the importance of tax exemptions for institutions like Harvard to fulfill their educational missions. The potential consequences of using the tax-exempt status as a tool for political retaliation were also highlighted, raising concerns about the future of higher education in the United States.
The law cited by Lakier, titled “Prohibition on executive branch influence over taxpayer audits and other investigations,” explicitly prohibits government officials, including the president, from interfering in IRS investigations of specific taxpayers. This legislation is designed to prevent situations where the president attempts to sway IRS actions for personal or political gain. Lakier pointed out that even if Trump claims he did not directly order the IRS to act against Harvard, his public statements could still be interpreted as intimidation, especially given the ongoing legal battle between Harvard and the administration over funding cuts. The potential threat posed by Trump’s remarks is seen as a clear violation of the First Amendment, which prohibits government officials from using coercion to suppress speech, as confirmed by a recent Supreme Court ruling.
McCaffery acknowledged that the IRS could theoretically initiate steps to revoke Harvard’s tax-exempt status, citing the precedent set in the case of Bob Jones University. However, he cast doubt on the agency’s ability to prove that Harvard’s actions violate public policy rather than simply reflecting political differences. The complex process of challenging an institution’s tax-exempt status involves audits, appeals, and potential court battles, making it a lengthy and arduous ordeal. McCaffery warned that Trump’s interference in the matter could weaken the administration’s legal arguments and undermine the credibility of the case.
Overall, the situation surrounding Trump’s threat to strip Harvard of its tax-exempt status is fraught with legal complexities and potential pitfalls. The implications of using tax exemptions as a political weapon raise serious concerns about the future of educational institutions like Harvard. Despite the IRS’s authority to investigate and potentially revoke tax-exempt status, the process is far from straightforward and could face numerous hurdles along the way. In the midst of ongoing legal battles and political tensions, the fate of Harvard’s tax status remains uncertain, with the specter of government interference looming large over the university.
