Politics
Trump administration proposes stripping tax exemptions from private schools with race-based policies
A draft Treasury Department rule would revoke nonprofit tax status for up to 18,000 private educational institutions using race-conscious admissions, scholarships, or facilities.
The short version
- The Treasury Department proposed a regulation to eliminate tax-exempt status for private schools and colleges offering race-based assistance to students.
- Federal estimates indicate up to 18,000 private educational institutions could be affected if the measure takes effect after May 2027.
- Administration officials state the policy targets discrimination under civil rights law, while universities and legal precedents point to constraints against ideologically motivated tax enforcement.
- The rule remains a draft proposal that must go through regulatory finalization before potential implementation.
Key facts
- The Treasury Department issued a proposed regulation that would remove the tax-exempt status of private schools and colleges that provide race-conscious benefits in admissions, scholarships, or facilities.[Associated Press · ABC News]
- If approved and finalized, the proposed regulation would take effect after May 2027.[Associated Press · ABC News]
- The Treasury Department and the IRS project that the rule could impact as many as 18,000 private educational institutions across the country.[Associated Press · ABC News]
- Treasury Secretary Scott Bessent stated that rebranded race-based initiatives would remain subject to the proposed restrictions.[Associated Press · ABC News]
- The Justice Department has opened separate investigations into admissions practices at multiple medical schools concerning alleged racial preferences.[Associated Press · ABC News]
What remains uncertain
- Whether the regulation will survive anticipated legal challenges remains unclear, given federal statutes prohibiting the IRS from targeting entities based on ideology.[Associated Press · ABC News]
- It is unknown how many institutions will alter their policies versus challenging the rule or forfeiting their nonprofit tax status before 2027.[Associated Press · ABC News]