The U.S. Treasury Department and IRS have proposed new regulations that would revoke the 501(c)(3) tax-exempt status of private schools, including K-12, that consider race, color, or national or ethnic origin in admissions, scholarships, or other programs.

This proposed rule, which would take effect after May 31, 2027, is a significant escalation in efforts to eliminate diversity, equity, and inclusion policies, potentially impacting thousands of private educational institutions and their ability to offer race-based support.