US IRS plans to ‘rescind’ Harvard's tax-exempt status amid Trump feud: All you need to know

The US Internal Revenue Service is planning to rescind the tax-exempt status of Harvard University, CNN reported on Wednesday, citing two sources familiar with the matter.

A final decision on rescinding the university's tax exemption is expected soon, the report added.

The report comes a day after US President Donald Trump threatened to strip Harvard University of its tax-exempt status after the school defied the government's demands to change its policies in exchange for billions of dollars of federal funding.

The US President said the university should apologise after it defied to submit to wide-ranging government oversight.

Spokespersons for the IRS and the US Treasury, which oversee the tax collection agency, did not immediately respond to a request for comment on the CNN report.

What did Trump administration say

Education Secretary Linda McMahon told CNN that she did not know whether Harvard would lose its tax-exempt status but argued “it was certainly worth looking into.”

“We’ll see what IRS comes back with relative to Harvard,” McMahon said.

She added, “I certainly think, you know, in elitist schools, especially that have these incredibly large endowments, you know, we should probably have a look into that.”

McMahon said it is her “guess” that the IRS is also looking at tax-exempt statuses of other universities.

Trump calls Harvard ‘a joke'

President Donald Trump recently called the elite university a ‘joke’ and threatened to strip it of tax-exempt status after $2 bn in funding was frozen.

“Harvard is a JOKE, teaches Hate and Stupidity, and should no longer receive Federal Funds,” Trump wrote in the lengthy post. “Thank you for your attention to this matter!”

Trump earlier posted on Truth Social on Tuesday, “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?’ Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!”

Harvard University said it will not acquiesce to US President Donald Trump's demands, whether it continues to receive federal funding or not.

"No government - regardless of which party is in power - should dictate what private universities can teach," Harvard's president, Alan Garber, said in a statement posted on the university's website.