The Trump administration has taken the extraordinary step of asking the IRS to revoke Harvard University's tax-exempt status over a political feud.
What *is* Harvard's tax-exempt status?: Many colleges are exempt from paying federal income and property taxes. That means donors can deduct any financial contributions — a major draw for colleges to attract big donors. This saves Harvard potentially hundreds of millions of dollars, per The New York Times.
The Trump administration's rationale: Tax-exempt status is reserved for religious, charitable and educational groups — but they are not allowed to participate in political activity. The White House has equated Harvard's policies (think: diversity, equity and inclusion initiatives, as well as the handling of protests, etc.) to political activity.
🔎 To get a glimpse into Trump's thinking, read this Truth Social post
Harvard University's rationale: Harvard argues this violates the First Amendment. The school argues it's free to develop its own policies and that government interference would be inappropriate.
Harvard is the wealthiest university in the world. Can it handle losing these tax benefits?: Harvard has more than a $50 billion endowment, after all. Morning Brew explains it well: "About 70% of the endowment funds are earmarked for specific programs by donors and cannot legally be used for unrelated purposes. But 20% is unrestricted and can plug budget holes. And if the administration succeeds in yanking Harvard's tax-exemption—which would likely entail a lengthy legal fight—the school could owe taxes on that endowment and its large real estate holdings."
Another threat: Homeland Security Secretary Kristi Noem also threatened to revoke Harvard's ability to enroll international students.
What happens now?: We wait to see what the IRS decides. CNN reports a final decision is expected soon.
Keep in mind: The Trump administration has already frozen more than $2 billion in grants and contracts for Harvard.
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