Trump administration seeks to strip private schools’ tax-exempt status over race-based policies
The Internal Revenue Service is proposing revoking the tax-exempt status of private schools that the Trump administration determines engage in racially discriminatory practices, including some programs that provide benefits based on race, according to a proposed rule announced Thursday morning.
Under the proposal, the IRS could revoke an institution’s federal tax-exempt status if it determines that the school has policies or practices that discriminate based on race.
The U.S. Department of the Treasury said the proposed regulation, which still needs to clear several rulemaking hurdles, could impact up to 18,000 private institutions, ranging from primary and secondary schools, to universities and trade schools, across the country.
“Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature,” Treasury Secretary Scott Bessent said in a statement announcing the rule.
The proposed regulation is part of the Trump administration’s ongoing effort to reshape higher education in the United States. The announcement said the rule would eliminate current IRS regulations that allow schools to offer financial assistance, admission preference or scholarships based on race, which the agencies determined are inconsistent with U.S. Supreme Court case law.
The Trump administration has previously cited the 2023 Supreme Court decision that ended race-based affirmative action in previous attempts to eliminate diversity, equity and inclusion policies on campuses.
The proposed rule drew swift criticism from the American Association of University Professors, a group representing faculty members that has been involved in a number of different lawsuits challenging the Trump administration’s actions related to higher education.
“Weaponizing the IRS to attack colleges and universities that uphold and expand civil rights is outrageous,” AAUP President Todd Wolfson said in a statement. “This is blatantly racist political coercion intended to deny minority students reparative opportunities to further their education.”
This story was originally published by EdSource.