Why Does Harvard Have Tax-Exempt Status and Can the IRS Revoke It? What to Know.
Posted on: Apr 17, 2025 16:49 IST | Posted by: Nytimes
Supported by
The university, like many colleges and charities, is exempt from federal income and property taxes, saving it billions of dollars. President Trump has questioned whether it should enjoy that status.
Matthew Mpoke Bigg and John Yoon
The Internal Revenue Service is weighing whether to revoke Harvard’s tax exemption, according to three people familiar with the matter, as the Trump administration and Harvard remain locked in a dispute over demands that the university make changes to its hiring, admissions and curriculum policies.
President Trump has called publicly for the Ivy League university to pay taxes, and the administration cut $2.2 billion in federal funding after Harvard refused to submit to the administration’s pressure campaign.
Here’s a look at the tax-exempt status afforded to Harvard — as well as most universities, charities and churches — and why it matters:
Tax-exempt status allows an organization to forgo paying federal income and property taxes under Section 501(c)(3) of the Internal Revenue Code, which means that donations to the institution are tax-deductible. Eligible organizations include those whose purpose is “charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition and preventing cruelty to children or animals,” according to the I.R.S.
The I.R.S. Places a number of restrictions on any organization claiming tax-exempt status. None of its earnings can go to a private shareholder or individual, and the body “may not be an action organization.” This means that it cannot try to influence legislation, participate in a campaign or support a political candidate, according to the Internal Revenue Code.
Simply put, tax-exempt status saves money and can boost credibility. It can also help an educational institution become a magnet for wealthy individuals seeking to donate large sums. In Harvard’s case, the loss of tax-exempt status could cost the university billions of dollars.
Institutions must apply to the I.R.S. For tax exemption, and a vast majority of universities do so, according to the Association of American Universities. This is because of their educational purpose, which “the federal government has long recognized as fundamental to fostering the productive and civic capacities of citizens,” the association’s website says.
Global News Perspectives
In today's interconnected world, staying informed about global events is more important than ever. ZisNews provides news coverage from multiple countries, allowing you to compare how different regions report on the same stories. This unique approach helps you gain a broader and more balanced understanding of international affairs. Whether it's politics, business, technology, or cultural trends, ZisNews ensures that you get a well-rounded perspective rather than a one-sided view. Expand your knowledge and see how global narratives unfold from different angles.
Customizable News Feed
At ZisNews, we understand that not every news story interests everyone. That's why we offer a customizable news feed, allowing you to control what you see. By adding keywords, you can filter out unwanted news, blocking articles that contain specific words in their titles or descriptions. This feature enables you to create a personalized experience where you only receive content that aligns with your interests. Register today to take full advantage of this functionality and enjoy a distraction-free news feed.
Like or Comment on News
Stay engaged with the news by interacting with stories that matter to you. Like or dislike articles based on your opinion, and share your thoughts in the comments section. Join discussions, see what others are saying, and be a part of an informed community that values meaningful conversations.
Download the Android App
For a seamless news experience, download the ZisNews Android app. Get instant notifications based on your selected categories and stay updated on breaking news. The app also allows you to block unwanted news, ensuring that you only receive content that aligns with your preferences. Stay connected anytime, anywhere.
Diverse News Categories
With ZisNews, you can explore a wide range of topics, ensuring that you never miss important developments. From Technology and Science to Sports, Politics, and Entertainment, we bring you the latest updates from the world's most trusted sources. Whether you are interested in groundbreaking scientific discoveries, tech innovations, or major sports events, our platform keeps you updated in real-time. Our carefully curated news selection helps you stay ahead, providing accurate and relevant stories tailored to diverse interests.
No comments yet.