Treasury aims to strip tax exemption from schools that use race in admissions

The IRS and Treasury announced they would strip tax-exempt status for schools that use race in admissions or other policies. File Photo by Kevin Dietsch/UPI | License Photo Sept. 3 (UPI) -- The Trump administration announced Thursday that it plans to strip tax-exempt status from private schools that consider race in admissions, scholarships or policies. Treasury Secretary Scott Bessent announced the rule, which he said is against schools that "engage in racial discrimination." "Under President [Donald] Trump, this Administration is standing up for America's students by ensuring racial discrimination has no place in American education," Bessent said in a statement. "Schools rebranding race-based preferences as equitable, inclusive or diversity-enhancing does not change their discriminatory nature. Today's Treasury and IRS proposed regulations establish a clear standard, and the institutions that continue to use discriminatory practices will no longer receive the benefits of federal tax-exempt status." Treasury and the IRS estimate that the rule could affect as many as 18,000 primary and secondary schools, colleges, universities, professional schools and trade schools. The regulations would apply to taxable years beginning May 31, 2027, the press release said. The schools who lose tax-exempt status won't likely pay much more in taxes, but it will affect those who donate directly to those schools and enjoy the tax exemption from those donations. The policy is likely to be challenged by the American Association of University Professors, the Washington Post reported. The union sued the administration last year over research funding cuts at the University of California, Los Angeles, and won. "Weaponizing the IRS to attack colleges and universities that uphold and expand civil rights is outrageous," Todd Wolfson, president of AAUP, told the Post. "This is blatantly racist political coercion intended to deny minority students reparative opportunities to further their education." The tax regulation the administration mentioned is Bob Jones University vs. United States. The 1983 case ruled that the IRS could revoke tax-exempt status for Bob Jones University because it had a policy banning interracial relationships. The Supreme Court upheld the decision because "racial discrimination in education violates a fundamental public policy." But fundamental public policy is not clearly defined. "Fundamental public policy is not something that the IRS can just go and grab; it needs to be something that is deeply anchored," Phil Hackney, a law professor at the University of Pittsburgh, told The New York Times. "Clearly, we are quite divided on this issue right now, there is nowhere close to overwhelming agreement." "They will state that what we used to call affirmative action is now a violation of fundamental public policy," Darryll K. Jones, a law professor at Florida Agricultural and Mechanical University, told The Times. "They have announced that they are going to use the new regulations to implement Students for Fair Admissions as far and as wide as possible." Students for Fair Admissions vs. Harvard is the 2023 Supreme Court case that said that using race in admissions violates the Equal Protection Clause of the 14th Amendment. "If a new administration is ever in position, I would think they would revoke these regs, but in the meantime a lot of damage can be done because people are running scared," Ellen Aprill, an expert in nonprofit taxes at the University of California, Los Angeles, told The Times. Vice President JD Vance announces the launch of the Trump Administration's Foundry School at the Institute of Peace on Thursday. The Foundry School is a national program designed to train entrepreneurs, engineers, technicians, and industrial leaders to help build on domestic manufacturing. Photo by Tierney L. Cross/UPI | License Photo Read More Vance, Rubio mark Trump administration's launch of Foundry School Trump to stump for 35 Republicans ahead of midterms Republican senator calls on Trump to fire Defense Secretary Hegseth