Harvard University may soon face the loss of its tax-exempt status, according to two individuals familiar with internal deliberations at the Internal Revenue Service (IRS) who spoke to CNN on Wednesday.
The move, reportedly being considered in coordination with the Trump administration, would represent a highly unusual and consequential action targeting the Ivy League institution.
Sources say a final determination by the IRS is expected shortly, as tensions between the university and the administration escalate over Harvard’s refusal to amend its hiring and governance practices in line with federal demands.
This follows the administration's decision to freeze over $2 billion in federal funds allocated to the school over its failure to handle the antisemitism on campus. Harvard has pushed back, citing the autonomy granted to private educational institutions under the US Constitution.
President Donald Trump has publicly criticized Harvard in recent days, linking his grievances to the university’s handling of issues he has framed as ideological and political.
“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!” Trump wrote on his social platform, Truth Social.
Speaking with CNN’s Kasie Hunt on Wednesday, Education Secretary Linda McMahon stated that while she was uncertain of the IRS’s final decision, she believed the matter merited investigation.
“We’ll see what IRS comes back with relative to Harvard,” she said. “I certainly think, you know, in elitist schools, especially that have these incredibly large endowments, you know, we should probably have a look into that.”
McMahon also suggested that other institutions may be under review: “It is my guess that the IRS is looking at tax-exempt statuses of other universities as well.”
The Trump administration recently issued a firm ultimatum to Harvard University, demanding sweeping policy changes as a condition for maintaining its access to nearly $9 billion in federal grants and contracts.
Harvard, like other universities in the US, has seen an uptick in anti-Israel activity since Hamas’ October 7, 2023, attack on Israel and the war in Gaza which followed. The university has come under fire over its handling of antisemitism on campus.
Just two days after the October 7 massacre, a coalition of 34 Harvard student organizations released a statement in which they blamed Israel for Hamas’ attack.
Later, then-Harvard President Claudine Gay came under fire after she, along with MIT President Sally Kornbluth and University of Pennsylvania President Liz Magill, testified before a congressional hearing on the issue of antisemitism on college campuses.
All three university presidents gave similar answers to Rep. Elise Stefanik in which they failed to unequivocally condemn antisemitism or even calls for genocide against Jews. Gay eventually resigned as President of Harvard.