Tax Notes Talk Harvard vs. Trump: The Battle Over Tax-Exempt Status
Aug 15, 2025
Join Ellen Aprill, a Senior Scholar at UCLA School of Law, as she dives into the intense legal battle between Harvard and the Trump administration over tax-exempt status. She unpacks the ramifications of potential revocation on nonprofit organizations, especially concerning funding and academic freedom. Topics include the processes of tax-exempt status audits, the implications of discrimination claims, and the broader impact on institutions. Aprill also discusses navigating compliance in a rapidly shifting public policy landscape.
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July 21 Hearing Highlights
- At the July 21 hearing the government argued Harvard was obligated to follow executive orders and that funding contracts allowed cancellation for nonconforming institutions.
- The judge questioned the Title VI connection to scientific research funding and whether procedures like notice and hearings were followed.
Revocation Threats As Settlement Leverage
- The administration may use threats to revoke exemption as leverage to extract settlements rather than follow through with revocation.
- If a settlement is reached, it's unlikely the IRS will pursue revocation afterward.
Revocation's Real Financial Impact
- Losing federal tax-exempt status may not be as catastrophic as headlines suggest because gifts can still be non-taxable under Section 102 and state property tax rules differ.
- The biggest risk is reduced deductible donations and reputational 'halo' loss that could shrink donor support.