As Trump Administration Cruelly And Unjustly Weaponizes Harvard’s Nonprofit Status, Leader Schumer, Senate Democrats Demand Treasury IG Investigate IRS And Administration’s Potential Criminal Activity Against Harvard
Washington, D.C. – Senate Democratic Leader Chuck Schumer (D-NY), along with Finance Committee Ranking Member Ron Wyden (D-OR), Elizabeth Warren (D-MA) and Ed Markey (D-MA), today sent the following letter to Acting Inspector General Hill demanding that she investigate the Trump Administration for potential criminal activity related to the IRS considering reversing the non-profit status of Harvard University.
Today, Senate Democratic Leader Chuck Schumer (D-NY), along with Finance Committee Ranking Member Ron Wyden (D-OR) and Senators Elizabeth Warren (D-MA) and Ed Markey (D-MA), today sent the following letter to the Acting Treasury Inspector General for Tax Administration (TIGTA), Heather Hill demanding that she open an investigation into alarming reports that the Trump Administration is pressuring the IRS to consider revoking the non-profit status of Harvard University. It is illegal and unconstitutional – not to mention immoral – for the IRS to use politically motivated reasons to revoke the tax-exempt status of schools, hospitals, churches, or any other tax-exempt entities. There must be an investigation into potential criminal activity related to this decision and to see if the Trump Administration is using the IRS to take other take politically-motivated actions.
“The President is targeting the non-profit status of Harvard University for blatantly political purposes,” the Senators wrote. “In a Truth Social post, the President stated that “Perhaps Harvard should lose its Tax-Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting ‘Sickness?’”[2] Furthermore, according to reports, the President is also targeting Harvard’s tax-exempt status because he disapproves of the university’s diversity and inclusion programs and claims that it has not sufficiently addressed anti-semitism on campus. The president’s call for Harvard to lose its tax-exempt status raises troubling constitutional questions, including whether the president is trying to squelch Harvard’s free speech rights and whether the revocation of its tax-exempt status will deprive the university of its due process rights.”
The Senators note that while Harvard University could potentially has the resources to fight this particular legal battle, it sets a dangerous precedent for President Trump to attack his perceived political enemies.
“Churches and synagogues, non-profit hospitals and clinics, charter and private schools, and any others that land on the President’s target list will be forced to relinquish their free speech rights in order to remain in existence, or otherwise face this organizational death sentence,” the Senators continued.
The full letter can be seen here and below:
Dear Acting Inspector General Hill:
We are writing to request that you open an investigation into alarming reports that the IRS, at the instruction of the President, is considering revoking the non-profit status of Harvard University.[1] It is both illegal and unconstitutional for the IRS to take direction from the President to target schools, hospitals, churches, or any other tax-exempt entities as retribution for using their free speech rights.
It is further unconscionable that the IRS would become a weapon of the Trump Administration to extort its perceived enemies, but the actions of the President and his operatives have now made this fear a reality. We request that you review whether the President or his allies have taken any step to direct or pressure the IRS to take politically-motivated actions regarding the tax-exempt status of the President’s political targets.
Losing tax exempt status can be devastating to a charity, and is often referred to as a “death sentence” for the non-profit. Loss of exempt status means that the entity becomes taxed as a for-profit corporation. Donor contributions to the organization are no longer tax deductible, likely resulting in a significant drop off of contributions, as well as difficulty obtaining loans and other financial assistance.
While Harvard University likely has the resources to litigate this issue, small non-profits will not have the means to stand up to the President. Churches and synagogues, non-profit hospitals and clinics, charter and private schools, and any others that land on the President’s target list will be forced to relinquish their free speech rights in order to remain in existence, or otherwise face this organizational death sentence.
The President is targeting the non-profit status of Harvard University for blatantly political purposes. In a Truth Social post, the President stated that “Perhaps Harvard should lose its Tax-Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting ‘Sickness?’”[2] Furthermore, according to reports, the President is also targeting Harvard’s tax-exempt status because he disapproves of the university’s diversity and inclusion programs and claims that it has not sufficiently addressed anti-semitism on campus. The president’s call for Harvard to lose its tax-exempt status raises troubling constitutional questions, including whether the president is trying to squelch Harvard’s free speech rights and whether the revocation of its tax-exempt status will deprive the university of its due process rights.
To make sure that organizations do not lose their tax-exempt status arbitrarily, or in this case at the whim of the President, the tax laws require a careful objective review of the actions of the organization.[3] Only after that review, and an opportunity to appeal, can the IRS revoke tax exempt status.[4] This is the process for all charitable organizations.
Regardless of the law, the current leadership of the IRS has reportedly made clear that they intend to target tax-exempt organizations that resist the President’s efforts to stifle their free speech rights and deny them due process. President Trump appointed Gary Shapley as the agency’s acting Commissioner after a series of rapid promotions. In addition to Trump reportedly requesting that the acting IRS Chief Counsel begin to take steps to strip Harvard of its tax-exempt status, Shapley told staff members in recent weeks that one of his first orders of business as an agency executive was to review and revoke the tax-free status of groups suggested by Republican allies in Congress, according to reports citing three individuals present in the meeting.[5] While Mr. Shapley is no longer running the IRS, we have no reason to believe that the goals of the IRS leadership have changed at all.
Laws passed in the wake of President Nixon’s efforts to weaponize the IRS make it “unlawful for any applicable person to request, directly or indirectly, any officer or employee of the Internal Revenue Service to conduct or terminate an audit or other investigation of any particular taxpayer with respect to the tax liability of such taxpayer.”[6] The law also requires that any employee of the IRS on the receiving end of such pressure must report that pressure.[7] It appears that the President publicly and repeatedly broke this law when he suggested that Harvard should lose its exempt status for not bending to his will and when he directed the acting Chief Counsel to open an investigation into Harvard’s tax exempt status.
While auditing Harvard for refusing to capitulate to the President’s demands is clearly troubling, we are even more concerned about the implications for organizations that are too small to resist pressure from the White House or do not have the resources for legal action. Church groups, hospitals, health clinics, or food banks could be next. If the President is able to successfully target Harvard’s tax-exemption, anyone could be next.
Therefore, we request that TIGTA open an investigation of the activities surrounding the President’s request that the IRS politically target Harvard and begin steps to strip it of its tax-exempt status. Specifically, we request that TIGTA investigate whether a request by the President (or others in his administration) that the acting IRS Chief Counsel revoke Harvard’s exempt status violates Code section 7217(a) and whether the acting IRS chief counsel is in violation of Code section 7217(b). We further request information regarding whether the IRS has taken any action to begin the process of examining or revoking the tax-exempt status of any other organization at the behest of the President, Vice President, or any other political appointee or Republican official, or whether there has been any communication requesting such action.
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