Higher Education Groups Condemn Proposed IRS Regulation Threatening Tax-Exempt Status of Private Colleges for Discrimination

Higher education advocacy groups and institutions are strongly criticizing a proposed Treasury Department and Internal Revenue Service (IRS) rule that could revoke the tax-exempt status of private, nonprofit colleges and universities found to have discriminated based on race or ethnicity. The IRS proposal broadly defines 'all forms' of racial or ethnic discrimination, including 'race-based action for the purpose of ameliorating societal discrimination' or 'past racial discrimination,' as grounds for losing tax exemption. Critics argue the rule is unclear, unlawful, and could be politically abused, potentially undermining institutional financial stability and donor contributions.