The battle between President Trump and Harvard University moved to a new front, and the IRS is now Cancellation Ivy League School’s tax exemption.
The Aaron Navarro report of CBS News has not yet been made by IRS yet. However, efforts were made after Tuesday Trump proposal Harvard can lose tax exemptions. Measures to consider whether a tax agency will remove the designation as an organization 501 (c) (3) Reported By CNN.
IRS has given nearly 2 million organizations from universities like Harvard to charity such as churches and foundations. This name is exempt from paying federal income tax, while donations to these groups are considered to be tax -deducted by IRS.
President Trump’s surveillance on Harvard tax status will come after Monday university. He rejected his executive You need to change the school’s policy and leadership, including student organizations and faculty members for “ViewPoint Diversity”. After Harvard announced the decision, the Trump administration moved to Harvard to freeze $ 2.2 billion in subsidies.
The Trump administration also threatened to cut others’ federal funds. Best university As campuses and academic programs are pressure on the policy of institutions that dominate student expressions.
However, organizing tax exemptions is rare for institutions with the size and reputation of Harvard, experts said.
Brian Galle, a tax policy professor at Georgetown University, told CBS Money Watch that “historically unprecedented.” “Certainly, major research universities have never lost tax exemptions.”
Here are some things to know about the problem.
Why is Harvard tax exempt?
“Organizations, which are considered to foster charity, religious, educational, science, literature, public safety tests, national or international amateur sports, and prevent cruelty for children or animals,” According to In IRS.
Most private and public universities and universities received tax exemptions by IRS due to their mission, and the federal government recognized the productivity of US citizens, contributions to citizens, and the importance of the American university association. Say.
Can Trump command IRS to remove Harvard’s tax exemption?
It is not legally not legally according to the Loyola University Chicago School of Law, a professor at the federal income tax and non -profit organization experts.
Because the parliament passed in 1998 law The president prohibits the IRS to audit or investigate taxpayers, he explained. If Trump instructed the IRS to remove Harvard’s tax exemptions, Brunson said, “It is exactly opposed to the law.”
The White House sends an email to CBS MoneyWatch. The White House said, “All the upcoming measures of the IRS will be carried out independently of the president, and this week, the investigation of the institution’s tax status of Trump’s social media posts questioned Harvard’s tax exemption.
IRS did not respond to the request.
Can IRS remove Harvard’s tax exemptions?
IRS has legal authority to remove the organization’s tax exemption status and sometimes exercises its authority. But it is usually because of a group that does not meet tax requirements. Ignore the file Annual information is returned for more than three years in a row.
One famous incident included a university that loses tax exemptions, Galle and Brunson pointed out. In the 1970s, Bob Jones University, located in Greenville, Greenville, a Christian institution, lost duty -free qualifications due to policies that ban racial relations.
This case ended in the Supreme Court. I ruled In 1983, the IRS was right to deprive Bob Jones status, deprived of its status because it violated the “basic national public policy” of racial discrimination of education.
The IRS can claim that Harvard violates public policy by not cracking down on protesters against Israel’s actions against Israel’s actions in Gaza, or rejecting the Trump administration’s diversity, equity, and policy included policies, Brunson said. But he and Gal expressed their skepticism that such theoretical evidence would be maintained in court because the university had a constitutional right to the freedom of the media.
“There is no agreement on society as a whole, which does not match the basic public policy to allow protests on campus.”
He added.
What happens if the IRS is peeled off Harvard with a tax exemption?
Brunson said IRS would first conduct an investigation and inform Harvard why to remove the tax exemption status. Then Harvard was able to appeal to the IRS. If the appeal fails, the university can take this problem to the court.
As the case progresses, the court is likely to be banned or ordered to stop the IRS decision, which is likely to continue to be operated as a tax exemption organization until Harvard is resolved, experts said.
Brunson said, “Harvard won’t lose it. They have alumni where money, resources, and alumni can get the best people who represent them.
How can I lose tax exemptions on Harvard?
Harvard can be hit by financial hits if you lose your tax exemption. However, the scope of damages similar to Harvard’s tax strategy to use a tax strategy to reduce tax -free income is unclear, with major companies relying on sophisticated technologies to reduce tax liability. For example, Harvard can reduce taxable income by deducting business costs, including teaching benefits.
In contrast, Harvard donors could have the impact because they could not deduct their donations to college in their taxes. This allows you to taste less contributing to the donor.
Brunson said, “The biggest cost is to reduce the donation.”
Harvard’s End Dowment has reached $ 52.3 billion, the largest in American universities.
What does Harvard say about the risk of tax exemption?
In a statement about CBS News, Harvard repeated the decision that the decision would be illegal.
The spokesman said, “The government has long exempted taxes from taxes to support the mission of education.” “Tax exemption means that all dollars can go to students, medical research that saves life and improves life, and scholarships for technological development that leads economic growth.”
The spokesman added, “There is no legal basis to withdraw Harvard’s tax exemption.”
