In a move unprecedented in modern U.S. history, President Donald Trump has vowed to strip Harvard University of its tax-exempt status, intensifying a months-long battle between his administration and one of the nation’s most prestigious academic institutions.

“We are going to be taking away Harvard’s Tax Exempt Status. It’s what they deserve!” Trump posted on Truth Social on 2 May, the same day his administration unveiled sweeping budget cuts to the Internal Revenue Service and escalated demands on universities to rein in political activity and antisemitism on campus.

The threat comes amid a federal funding freeze on over $2.2 billion in grants to Harvard, part of a larger campaign by Trump’s administration to pressure elite universities to comply with new federal guidelines. These include eliminating diversity, equity and inclusion (DEI) programs and imposing stricter controls on international students and faculty accused—without public evidence—of antisemitic behavior or supporting terrorism.

Harvard pushes back

Harvard President Alan Garber responded to Trump’s announcement by calling the threat “highly illegal” and “destructive,” warning that such a move would cripple financial aid, derail medical research, and undermine innovation.

“There is no legal basis to rescind Harvard’s tax-exempt status,” a university spokesperson said. “Such an unprecedented action would endanger our ability to carry out our educational mission.”

In its lawsuit against the administration filed last month, Harvard accused the White House of violating the First Amendment and circumventing due process in freezing billions in federal support. The school has refused to sign a sweeping “agreement in principle” drafted by the administration that would effectively place Harvard’s hiring, admissions, and discipline policies under federal oversight.

A political flashpoint

The president’s threat has drawn sharp rebukes from Democrats in Congress. Senate Majority Leader Chuck Schumer and others have called for an investigation into whether Trump is illegally directing the IRS to punish political opponents. “It is both illegal and unconstitutional,” they wrote in a letter to the Treasury Department inspector general.

Education Secretary Linda McMahon defended the administration’s position, stating that taxpayer dollars are a privilege, not a right, and that universities must comply with civil rights laws and protect Jewish students from harassment.

Trump’s supporters have framed the move as part of a broader effort to root out political bias in academia. “We’re going to bankrupt these universities,” declared Leo Terrell, head of the administration’s Task Force to Combat Antisemitism, in a recent Fox News appearance.

An existential fight

Revoking a university’s tax-exempt status is virtually unheard of. The last major case occurred in the 1970s, when Bob Jones University lost its exemption due to racially discriminatory policies. That decision was ultimately upheld by the Supreme Court.

Harvard’s legal team argues that its case is different. “No government—regardless of which party is in power—should dictate what private universities can teach, whom they can admit and hire, or how they conduct research,” said Garber.

Meanwhile, the university has made symbolic concessions, including renaming its DEI office and releasing reports on campus bias, but insists it will not “surrender its independence.”

Timeline: How the clash unfolded

29 Jan 2025 — Trump signs executive order on antisemitism in higher education
27 Feb — DOJ sends letter to Harvard demanding action on campus antisemitism
31 March — GSA begins official review of Harvard’s $8.7B in federal contracts
11 April — Harvard receives sweeping list of demands from Trump administration
21 April — Harvard files suit against the government over funding freeze
2 May — Trump publicly vows to revoke Harvard’s tax-exempt status on Truth Social