President Trump on Friday declared his intention to revoke Harvard University's tax-exempt status, intensifying his administration's months-long confrontation with the Ivy League institution over its handling of campus antisemitism and compliance with federal directives.
"We are going to be taking away Harvard's Tax Exempt Status. It's what they deserve!" Trump wrote in a post on his Truth Social platform, following up on previous threats to target the university's financial privileges if it failed to enact "critical reforms" sought by the administration.
The announcement follows a decision in March by the White House to freeze $2.2 billion in multiyear federal research grants to Harvard. The administration argued the school had not taken sufficient action to address what it described as "terrorist-inspired" hate speech and antisemitism on campus following the Oct. 7 Hamas attack on Israel.
"Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!" Trump wrote last month, suggesting Harvard had violated its obligations as a nonprofit educational institution.
The Internal Revenue Service grants tax-exempt status under Section 501(c)(3), allowing universities to avoid income taxes on most earnings and enabling donors to deduct charitable gifts. But federal law bars presidents from directing IRS enforcement actions, raising questions about the legal mechanism for Trump's threat.
Harvard spokesperson Jason Newton responded sharply Friday, warning that revoking the school's tax-exempt status "would endanger our ability to carry out our educational mission."
"It would result in diminished financial aid for students, abandonment of critical medical research programs, and lost opportunities for innovation," Newton said. "The unlawful use of this instrument more broadly would have grave consequences for the future of higher education in America."
According to IRS rules, nonprofits may not engage in political campaign activity and must serve a charitable purpose. Violations can result in revocation, though typically through administrative procedures, not executive orders.
Harvard maintains an endowment of approximately $53 billion, which generated around $2.4 billion in income last year. Nearly 38% of the university's $6.4 billion annual budget is funded by endowment earnings. A change in status could expose that revenue to the 21% corporate tax rate, potentially cutting $525 million annually from university coffers.
Legal scholars say the implications are murky. Howard Abrams, a visiting professor at Harvard Law School, said in a prior interview that "it's not clear to me how financial aid would be treated" if Harvard were taxed as a corporation.
The university filed a lawsuit this spring challenging the grant freeze as a violation of the First Amendment. The complaint asks a federal court to overturn the funding decision and bar future reprisals tied to protected speech.
Trump's move prompted swift backlash from congressional Democrats. Senate Majority Leader Chuck Schumer and several colleagues sent a letter Friday to the Treasury Department's inspector general, urging an investigation into whether the president had improperly directed the IRS to retaliate against Harvard.
"It is both illegal and unconstitutional for the IRS to take direction from the President to target schools, hospitals, churches, or any other tax-exempt entities as retribution for using their free speech rights," the lawmakers wrote.
Harvard President Alan Garber, speaking on NBC last week, defended the school's efforts to address antisemitism and criticized the administration for linking speech issues to unrelated research funding. "Putting that research at jeopardy because of claims of antisemitism seems to us to be misguided," Garber said.
