Discrimination and Tax Exemptions
The proposal comes amid the administration’s long-running battle with a number of prominent universities, including its repeated threats to pull Harvard University’s tax exemption. It is part of a broader initiative by the administration to scrutinize the nonprofit sector, including whether individual groups deserve their exemption from taxes.
It also comes in the wake of the Supreme Court’s 2023 Students for Fair Admissions v. Harvard decision ending race-based affirmative action, which the administration has cited in cracking down on diversity, equity and inclusion policies in higher education. This has included trying to expand the scope of the high court’s ruling to scrap race-neutral admissions practices, like socioeconomic factors, and grant programs supporting campuses with large populations of Hispanic and Asian students.
“Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature,” Treasury Secretary Scott Bessent said in a statement.
The proposed rules will establish a “clear standard, and the institutions that continue to use discriminatory practices will no longer receive the benefits of federal tax-exempt status.”
The American Association of University Professors, which has battled the administration in court over a number of its decisions, ripped the proposal. AAUP faculty chapters, including those at Columbia, Harvard and UCLA, have been key to challenging the Trump administration’s efforts to force colleges into deals that align with the president’s higher education policies.
“Weaponizing the IRS to attack colleges and universities that uphold and expand civil rights is outrageous,” Todd Wolfson, the group’s president, said in a statement. “This is blatantly racist political coercion intended to deny minority students reparative opportunities to further their education.”
