Treasury and IRS Propose Regulations Barring Tax-Exempt Status for Discriminatory Private Schools

The U.S. Department of the Treasury and the IRS published Proposed Regulations on September 4, 2026, to codify that private schools cannot maintain tax-exempt status under Section 501(c)(3) if they discriminate based on race, color, or national or ethnic origin. The proposal would treat all race-conscious admissions or scholarship programs as prohibited discrimination and could affect up to 18,000 private educational institutions.