Trump is using the IRS and nonprofit status to chill affirmative action

The Trump administration has just issued proposed regulation s stripping private schools of their tax-exempt status if they consider race for admissions and certain other purposes. In doing so, Trump is tightening his hammerlock on institutions that have sought diversity in their classrooms.

Last year, Trump called for the IRS to strip Harvard , one of his favorite piñatas, of its tax-exempt status. Experts said this would be contrary to a federal law prohibiting the IRS from carrying out politically directed audits. Although schools would probably still not owe much in federal income taxes if they lost tax-exempt status, the loss of status would mean donors’ contributions would no longer be tax deductible. Fundraising would thus be dramatically hampered.

The proposed regulations amplify Trump’s executive orders, pious in tone but pernicious in impact, purporting to end discrimination and restore merit-based opportunity. The regulations, which are subject to a lengthy public comment period that might engender changes, would apply to taxable years beginning on or after May 31, 2027, providing affected institutions with sufficient time to bring their policies into compliance.

If upheld, affirmative action in education benefiting Black and other racial minority students is dead as a doornail. Trump argues that such policies violate the law in the wake of a 2023 Supreme Court ruling banning the use of race-conscious admissions. His administration has recently accused several medical schools of discriminating against white and Asian students in admissions and has opened investigations into numerous universities.

In the majority opinion in that case, Chief Justice John Roberts declared that any applicant “must be treated based on his or her experiences as an individual — not on the basis of race.” He also said the court’s opinion should not be “construed as prohibiting universities from considering an applicant’s discussion of how race affected his or her life, be it through discrimination, inspiration or otherwise.”

Treasury Secretary Scott Bessent said the administration is ensuring racial discrimination has no place in American education, and that “rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature.” But it is Bessent who is doing the rebranding. Can he say with a straight face that favoring on-campus equity or diversity is now discriminatory? The new policy only disadvantages those who may need a helping hand after two centuries of discrimination. And what does any of it have to do with the tax laws? As Chief Justice Marshall famously said, “The power to tax is the power to destroy.”

The Treasury said it was overruling existing IRS guidance allowing schools to favor minorities in admissions, programs and financial assistance as part of an effort to create a more equitable campus. The proposal still would allow schools to help disadvantaged students in admission or financial aid using race-neutral criteria such as family income, hardship or academic achievement.

There may be serious legal questions surrounding Trump’s action. In Bob Jones University v. U.S. , the court held an organization could not receive tax-exempt status if it was in opposition to a “fundamental public policy.” In that case, the IRS revoked the tax-exempt status of Bob Jones University because the school had a policy banning interracial relationships. The Supreme Court upheld the IRS’s decision because “racial discrimination in education violates a most fundamental public policy.”

Trump argues that giving a preference to Black or other minority applicants likewise runs counter to fundamental public policy. But Phil Hackney, a law professor at the University of Pittsburgh , aptly questioned whether courts would agree with Trump’s definition of a “fundamental public policy.”

“Fundamental public policy is not something that the IRS can just go and grab; it needs to be something that is deeply anchored, he said.

Under the proposed rules, a private school or college, or even a trade school, would not qualify for federal tax-exempt status if it considers race at all in making basic decisions, even if the decisions benefit minorities. The rule would apply across admissions, educational policies, scholarships and loans, athletics and every other school-administered program.

The Treasury and the IRS estimate that the proposal may affect as many as 18,000 private educational institutions.

The proposal would not prevent private schools from maintaining religious missions, curricula, or program of religious observance. Parochial schools could continue to select students based on genuine religious affiliation or membership, to remain consistent with existing federal law.

The proposal allows schools to continue expanding educational opportunities to assist disadvantaged students using race-neutral criteria such as family income, geographic location, first-generation status, individual hardship, military family status or academic achievement when awarding admission or financial assistance.

The bottom line is that the new regulations give Trump another weapon in his effort to chill what we used to call “affirmative action” at institutions of learning. As American Association of University Professors President Todd Wolfson told the New York Times , “This is a blatantly racist political coercion intended to deny minority students reparative opportunities to further their education.”

James D. Zirin is a former federal prosecutor in the Southern District of New York and a published legal analyst.