U.S. Higher Education Groups Rally Against IRS Tax-Exemption Proposal as Comment Period Closes With Nearly 2,400 Comments
WASHINGTON — A Treasury Department and Internal Revenue Service proposal on the tax-exempt status of private, nonprofit colleges drew concentrated opposition from higher education groups as its comment period closed. According to Inside Higher Ed on November 4, as of Tuesday, November 3 — the last day to submit public comments — the agency had received nearly 2,400 comments, which it must review and respond to before possibly finalizing the change. The proposal itself was unveiled in September; the new development in this report is the close of comments and the opposition filings, not the proposal's first publication.
Under the proposal, officials could revoke a private college or university's tax exemption if they determine it has discriminated based on race or ethnicity. The IRS said its regulation would mean "all forms of racial discrimination in education, regardless of the intent behind or the legality of such discrimination (for example, where such discrimination is defended as serving remedial or diversity-related objectives), are against a fundamental public policy of the United States and thus preclude a school's exemption from Federal income tax." The rule would cover the administration of educational and admissions policies, scholarship and loan programs, athletic programs, and any other school-administered or school-supported program. The National Association of College and University Business Officers said losing the exemption could "severely undermine institutional financial stability," because donors would no longer be able to write contributions off on their taxes.
Opposition focused on the rule's vagueness and scope. American Council on Education President Ted Mitchell submitted a roughly 15-page comment on behalf of his organization and 40 other higher education groups, including the National Association of Independent Colleges and Universities and the American Association of University Professors. Mitchell wrote that it is unclear whether "contentious or even offensive classroom instructions on race or history topics" could fall into the IRS's broad definition of "discrimination," or what campus or student activities could be deemed "school-administered or school-supported"; he also wrote that the Bob Jones case set a high bar for revocation, while the proposal could punish isolated, episodic or unintentional incidents outside admissions. Kristen F. Soares, president of the Association of Independent California Colleges and Universities, which says it represents more than 85 institutions, wrote that the proposal offers "no clear safe harbors, notice-and-cure period, corrective action process, or intermediate sanctions before an institution's tax-exempt status is put at risk." Treasury Secretary Scott Bessent said when he unveiled the plan in September that schools rebranding race-based preferences as "equitable, inclusive, or diversity-enhancing" does not change their discriminatory nature; the IRS cited the 1983 case Bob Jones University v. United States, decided 8-1, which upheld revoking the exemption of a school that denied admission over interracial marriage. This report does not state the final rule's content or effective date; neither has been announced.
Source: Internal Revenue Service
Published by GSM · USA (original Chinese edition)
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