By: Robert J. Delahunty – nationalreview.com – April 21, 2025

Thanks to a 1983 opinion widely hailed by progressives at the time, the administration could be on solid ground.

In a recent Truth Social post, President Trump wrote: “Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing its political, ideological, and terrorist inspired/supporting ‘Sickness?’” This followed an earlier threat to cut off $9 billion in federal funding unless Harvard agreed to a list of administration demands for reforms, including merit-based hiring, an end to preferences in admissions based on “race, color, national origin, or proxies thereof,” an outside audit of “programs and departments that most fuel antisemitic harassment,” and the discontinuation of DEI. Rejecting these demands, Harvard declared that “antisemitism and discrimination of any kind not only are abhorrent and antithetical to Harvard’s values but also threaten its academic mission.” Since that exchange, it has been reported that the Department of Justice has asked the IRS to review and revoke Harvard’s tax-exempt status.

Thanks to a 1983 Supreme Court opinion widely hailed by progressives at the time, the Trump administration may have stronger grounds than at first appears to reconsider Harvard’s tax status. Harvard is a tax-exempt organization as an educational institution under Section 501(c)(3) of the Internal Revenue Code. Section 501(c)(3) exempts organizations “operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes.” Tax-exempt status carries great advantages, because it frees Harvard from federal income tax and its donors can make tax-deductible contributions. Loss of the exemption would cost Harvard an estimated $500 million annually.

But the IRS can remove 501(c)(3) designation if the organization engages in conduct that violates “established public policy.” The Supreme Court recognized this public policy doctrine in Bob Jones University v. United States (1983). Bob Jones was a private Christian university that prohibited interracial dating and marriage based on its understanding of biblical teachings. The IRS concluded that Bob Jones’s rule violated fundamental national policy. Agreeing with the IRS, the Supreme Court found that the institution’s purpose “must not be so at odds with the common community conscience as to undermine any public benefit that might otherwise be conferred.” It concluded, “it would be wholly incompatible with the concepts underlying tax exemption to grant the benefit of tax-exempt status to racially discriminatory educational entities.”

To bolster its conclusion that “there can be no doubt” that Bob Jones’s prohibition was “contrary to a fundamental public policy” and “violate[d] deeply and widely accepted views of elementary justice,” the Court marshaled evidence from all three branches of the federal government, including its own desegregation decisions from Brown vs. Board (1954) onward, the Civil Rights Act of 1964, and a host of executive-branch actions starting with orders by President Truman. The Court also noted that although the IRS had not announced its interpretation of section 501(c)(3) until 1970, the fact that its decision “may be seen as belated” did not “undermine its soundness.”

Bob Jones provides the linchpin upon which the Trump administration can build its case against Harvard. In fact, the Supreme Court has already found that Harvard blatantly violated the Constitution with discriminatory policies. In 2023’s Students for Fair Admissions v. Harvard  (SFFA), the Justices held that Harvard’s use of race in admissions intentionally discriminated against Asian-American and white applicants. New lawsuits claim that Harvard uses proxies to continue to engage in racial “balancing” in its student body.

The Trump administration could further claim that Harvard’s failure to protect Jewish students from harassment also violates the public policy against racial discrimination. On the night of Hamas’s October 7, 2023, attack on Israel, more than 30 student groups posted an open letter that held Israel “entirely responsible.” Harvard President Claudine Gay had to resign after a disastrous appearance before Congress in which she could not explain Harvard’s position on antisemitism or whether students who harassed Jewish students would be disciplined. In 2024, a federal judge allowed two lawsuits by Jewish groups to proceed against Harvard for allowing students and professors to threaten and assault Jewish students and for permitting a “severe and pervasive antisemitism on campus.” Harvard settled the cases only a few months ago. While Harvard’s interim president, Alan Garber, wrote earlier this week that the university has a “moral duty to fight antisemitism,” the Trump administration could take the view that Harvard has done little.

Both Harvard’s pursuit of racial diversity in its student body and faculty and its failures after October 7 could provide grounds to strip the school of its tax-exempt status. Bob Jones could support the view that racially discriminatory practices of any kind are repugnant to public policy. On the other hand, the Bob Jones Court bolstered its conclusion by describing at length the views of Congress and the executive branch — which would not have been necessary if the Court’s own post-Brown cases against segregation had been sufficient to show “established” public policy.

Harvard’s defenders will respond that the three branches of government have not presented the same united front on affirmative action in higher education as in Bob Jones. Going back to its 1979 decision in the Bakke case, the Court itself — until SFFA — had upheld such “benign” discrimination, albeit by narrow majorities and many misgivings. As for the executive branch, then-President Biden denounced SSFA v. Harvard as erroneous. The IRS itself had ruled that “a policy of a school that favors racial minority groups with respect to admissions, facilities and programs, and financial assistance” does not “constitute discrimination on the basis of race when the purpose and effect is to promote the establishment and maintenance of that school’s racially nondiscriminatory policy as to students.” Harvard will reach for this Orwellian doublespeak, typical of the Biden administration and education bureaucrats, to claim that “benign” racial discrimination does not violate public policy.

Harvard, however, will run into a brick wall: the Court itself. In SFFA, the Supreme Court authoritatively declared that Harvard violated the Constitution with its racial admission policies. It rejected the idea that benign motives could justify the use of skin color in admission decisions. SFFA now receives the full-throated support of the executive branch. President Trump has issued executive orders demanding that all universities end diversity, equity, and inclusion policies in their operations.

If Harvard takes its case to the Supreme Court, the Trump administration will ask the Court to expand Bob Jones. It will argue that the agreement of the other branches on public policy is unnecessary and that only the Court’s view that racism violated public policy mattered. It will argue that the SFFA decision in itself established that racial affirmative action was contrary to basic public policy.

Even apart from purging itself of racial discrimination and antisemitism, Harvard unquestionably needs major reforms. Despite its claims to pursue truth and viewpoint diversity, the Foundation for Individual Rights and Expression in 2024 gave Harvard its lowest score possible, 0.00 out of 100. Indeed, Harvard was the only one of 251 universities rated as “Abysmal” for its speech climate. Yet there are points where the Trump administration has gone too far in its efforts to reshape Harvard. Requiring a more transparent, academics-based governance structure; ensuring merit and viewpoint diversity in admissions and faculty hiring; and auditing specific departments that “reflect ideological capture” or that are suspected of antisemitism — all make for excellent policies. In a perfect world. But they seem to fall outside the mandate of a national government whose only true power here is to end racial discrimination and ensure that its grant recipients obey the Constitution and federal law. Conservatives should worry that a President Gretchen Whitmer in 2029 will exploit the precedent set here to force colleges and universities to return to aggressive Obama/Biden-esqe DEI programs, capture of departments by extreme Marxist ideologues, and disregard of the rights of political and religious minorities.

On the other hand, Harvard’s defense on the ground of its academic freedom and its contributions to science and medicine (note that it neglects to praise its advancements in Middle Eastern studies or critical race theory) avoids the central constitutional question. In Bob Jones, the Court ignored the teaching and research benefits of the university; the justices even rejected the claim that the university had the religious freedom to follow its reading of the Bible. The question remains whether the taxpayers should subsidize an institution that engages in racial discrimination. In this case, the Court is unlikely to allow Harvard’s secular gods to justify policies that deprived even religious schools of their elevated nonprofit status.

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Source: Case to Revoke Harvard’s Tax-Exempt Status: Supreme Court Ruling Could Support | National Review