Harvard's Tax-Exempt Tango: When Academia Meets the IRS Two-Step

Harvard University’s tax-exempt status has been questioned by the Trump Administration—with Harvard responding that there is no legal basis for a revocation. The Administration’s action impacting Harvard flows from its letter on policy changes at the university and a post on President Trump’s Truth Social platform. In Executive Order 14235, issued on March 7, Trump directs the Secretary of Education to propose regulations that exclude certain nonprofit organizations from the federal Public Service Loan Forgiveness program if they have a “substantial illegal purpose,” defined in the Executive Order to include activities such as aiding or abetting violations of federal immigration laws, supporting terrorism, aiding or abetting illegal discrimination, or violating state tort laws. Whether a violation can predicate a loss of tax-exempt status is dubious, but a battle is likely forthcoming.

Read now »

Related Content

• Exempt Organizations: Navigating R.C. Section 501(c)(3)
  Examine the substance and form in the pathway to successful engagement with the IRS to secure legitimate approval of tax-exempt status. The focus is on Section 501(c)(3) organizations but provides some background for other tax-exempt organizations. 

• Tax-Exempt Organizations Compliance
  Learn more about different types of tax-exempt organizations and the process required for maintaining IRS (and IRC) compliance. Broadly speaking, an organization's tax-exempt status might be revoked for several reasons, including (1) violation of tax laws, such as political campaigning or lobbying beyond permitted limits; (2) allowing a private benefit or inurement to private individuals or insiders; (3) failing to operate exclusively for the purposes that justify its tax-exempt status, such as charitable, educational, or religious activities; (4) non-compliance with reporting requirements; (5) engaging in illegal activities; or (6) earning too much income from UBTI.

Practical Guidance Updates 
Featuring the latest updates from your Practical Guidance account.    

• Tax Key Legal Developments Tracker (Federal) (Current)—keep up to date with key legal developments!
  • Tax Legislation. Thomas A. Barthold, chief of staff of the Joint Committee on Taxation, issues letter and report to select Senators and Representatives about the severity of the tax cuts in current House Bill. Letter (Apr. 3, 2025).
  • Tax Legislation. Congressman Brendan F. Boyle (PA-02), Ranking Member of the House Budget Committee and member of the Ways and Means Committee, introduces bicameral legislation to ensure that millionaires pay a higher tax rate than middle-class Americans. The bill would establish a 30% minimum tax on individuals earning more than $1 million annually. Paying a Fair Share Act.
  • Business Entities. United States imposes 10% baseline tariffs (paused higher reciprocal tariffs for targeted countries, other than China). Harmonized Tariff Schedule of the United States. See Trump Administration Tariffs Tracker.
  • Business Entities. IRS provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate as prescribed by I.R.C. § 1274. Rul. 2025-10.
  • Tax Practice, Procedure, and Controversy. President Trump signs into law J. Res. 25, a joint resolution of disapproval nullifying final regulations (89 Fed. Reg. 106928 (Dec. 30, 2024) on digital asset reporting issued on December 30, 2024. The resolution was passed by the Senate on March 26, 2025.
• Document alerts allow you to stay current on legal developments that affect your practice. Find out how to set up your document alerts.
• New! Discover Practical Guidance Content and Resources
  Read  this update to see the newest additions to Practical Guidance. This guide is designed to help you find the tools and insights you need to work more efficiently and effectively.
• Review the Chevron Reversal Impact Resource Kit for analysis related to the Supreme Court’s decision to overturn four decades of deference to federal agency interpretations of ambiguous statutes.
• Keep current on Trump administration developments by referencing the Presidential Executive Actions Tracker, Legal Challenges to 2025 Presidential Executive Orders and Actions Tracker, and Trump Transition Resource Kit.
• The Practical Guidance Journal 2025 Edition One features guidance on what attorneys need to know about deepfake technology, a look ahead at AI risk management, an artificial intelligence checklist, and a review of cautions and key AI legal issues in DEI and employment discrimination.
• Browse the Practical Guidance Author Center to see the 2600+ leading attorney authors contributing to our 26 practice areas. Interested in becoming a Practical Guidance author? Click here for details. Practical Guidance is committed to amplifying diverse voices of attorneys across all differences, including gender and race.   
• Legal Developments provide the latest updates and analyses of emerging topics impacting your practice area. Visit the Legal Developments page to see the latest topics, which also include breaking legal news and related Practical Guidance content. 
• New and Recently Updated Practical Guidance Content
  • IRS Tax Collections
  • Final Regulations on Micro-Captive Listed Transactions and Micro-Captive Transactions of Interest
  • Expatriation Tax: The Tax Consequences of Renouncing U.S. Citizenship
  • Partnership Agreements and Allocations under Code Section 704(b)
  • Qualified Bond Issues in Public Finance: IRC Section 144
  • Multistate Corporate Audit Issues State Law Survey
  • Federal Tax Legislation Tracker (2025)

PRACTICAL GUIDANCE CUSTOMER EMAIL EDITION ON THE WEB

Experience results today with practical guidance, legal research, and data-driven insights—all in one place.

Experience Lexis+