https://thefederalist.com/2026/09/03/new-irs-rule-to-strip-private-schools-at-all-levels-of-tax-exempt-status-for-using-dei/
New IRS Rule To Strip Private Schools At All Levels Of Tax-Exempt Status For Using DEI
By: Breccan F. Thies
September 03, 2026
The Trump administration is hitting private schools where it hurts the most: their tax-exempt status. A new rule proposed by the Internal Revenue Service (IRS) on Thursday would strip private schools at all levels of education of tax-exempt status for using racial preference policies like diversity, equity, and inclusion (DEI).
The Treasury Department estimates that the new rule could affect the statuses of18,000 private elementary, secondary, and post-secondary institutions, including colleges, universities, and trade and professional schools.
According to Treasury Secretary Scott Bessent, the move is designed to go after schools that have claimed to get rid of their DEI departments and policies, but in reality have only hidden them from public scrutiny while the Trump administration goes after racial discrimination.
“Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature,” he said in a statement. “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.”
Harvard Universitymay have started the trend in 2023 after the Supreme Court decided Students for Fair Admissions v. Harvard, ruling that race-based admissions schemes like affirmative action are unconstitutional. Immediately after, then-President Claudine Gay, the disgraced plagiarist who still retains a job at the school after resigning the presidency, signaled that prospective students could still benefit from communicating their race on their applications, hinting that admissions boards would still consider that factor.
Harvard also rebranded its DEI office from the “Office of Equity, Diversity, Inclusion, and Belonging” to the “Office of Community and Campus Life.” Hiding the programs while still keeping them functional is a strategy employed by numerous schools. The Justice Department recently determined that Yale Medical School discriminated based on race….