Harvard University is resisting President Trump's threat to revoke its tax-exempt status, arguing there is no legal basis for such an action, which could severely impact its finances and educational mission. The university expressed concerns that losing this status would reduce financial aid, hinder medical research, and stifle innovation. Despite Trump's assertions, it remains unclear if the IRS is moving forward with revocation, as federal law prevents the president from directing tax investigations. The conflict is part of a broader campaign by the Trump administration against elite universities, which it accuses of discrimination, leading to a legal standoff that includes Harvard suing over frozen federal funds. The IRS has faced accusations of being used as a political tool, with both Democrats and Republicans expressing concerns about its impartiality and the legality of presidential influence over tax-exempt status decisions.

Harvard University is preparing to contest President Trump's threats to remove its tax-exempt status, citing a lack of legal grounds for such action and warning of adverse effects on its financial aid, research, and innovation capabilities.

The potential loss of tax-exempt status could lead to Harvard paying federal taxes on its income and a decrease in donations, which currently make up a significant portion of its revenue through its $53 billion endowment.

The Trump administration's pressure on elite universities, including Harvard, involves accusations of antisemitism and discrimination, demanding changes in admissions and hiring policies, and submitting reports to the government.

Despite Trump's online declarations, the IRS's involvement in revoking Harvard's tax status is uncertain due to legal restrictions on presidential influence over tax investigations, requiring any IRS directive from the president to be reported.

The IRS has been criticized for being used politically, with past allegations of targeting conservative groups, and concerns have been raised about the legality and constitutionality of presidential directives in assessing tax-exempt statuses.

A group of Democratic senators has requested an investigation into Trump's targeting of Harvard by the IRS, emphasizing the illegality and unconstitutionality of presidential influence over tax exemptions.

Even if the IRS does not change Harvard's tax status, Republicans plan to increase the tax on university endowments, highlighting ongoing political tensions regarding university funding and taxation.