Commentary on Harvard University, Tax Exemption, and Fundamental Public Policy
- Marie Sapirie, Harvard Has a Precedent Problem in Fight to Keep Exempt Status. It begins:
President Trump’s musings about Harvard University possibly losing its tax-exempt status for failing to adhere to public policy crystallized May 2 into what appears to be an actual plan to revoke the school’s exemption. The move highlights a long-standing problem that the IRS and Congress should have remedied long ago.
- Ellen P. Aprill, Brian D. Galle, Philip Hackney, and me, Harvard Does Have Options if It Loses Tax-Exempt Status. Abstract:
As scholars of nonprofit, tax-exempt organizations, we wish to take issue with Marie Sapirie’s recent article, Harvard Has a Precedent Problem in Fight to Keep Exempt Status. We admire and learned from her history of Bob Jones University v. United States. However, we disagree with her characterization of both the case and the avenues for judicial review available to organizations facing revocation of exemption. Bob Jones University teaches that we must distinguish “public policy” from “fundamental public policy.” As in Bob Jones University, fundamental public policy involves core values. A new presidential administration is free to establish a new public policy. But such a new public policy does not create a fundamental public policy. Finally, if the IRS fails to observe the distinction between public policy and fundamental public policy in revoking Harvard’s exemption, Harvard will have several avenues for seeking judicial review. In particular, in response to Bob Jones University’s difficulty in obtaining judicial review of its revocation, Congress enacted section 7428 in 1976 in order to provide organizations facing IRS denial or revocation of exemption the ability to seek a declaratory judgment from any of several federal courts.
- Harvey P. Dale, Daniel J. Hemel, and Jill S. Manny, What Are the Real Tax Risks for Harvard?. Abstract:
In this article, the authors question claims that Harvard’s potential loss of its tax-exempt status would result in hundreds of millions of dollars in annual income tax liability and a dramatic decline in donations.
- Neal Katyal, The Law Bars Trump From Threatening Harvard’s Tax Exemption. It begins:
When Congress created the federal income tax in 1913, it excluded universities, recognizing that these institutions repay the nation in minds, not money. No U.S. president has questioned that exemption until now. President Trump on May 2 posted on Truth Social: “We are going to be taking away Harvard’s Tax Exempt Status. It’s what they deserve!”
Federal law, however, bars members of the executive branch—including the president—from influencing the Internal Revenue Service’s decision to target any particular taxpayer.
Lloyd Mayer