The Internal Revenue Service, the federal tax agency, released a proposal Thursday that, if codified, could strip the tax-exempt status from thousands of private schools the administration deems racially discriminatory.
Consistent with the Trump administration’s attempts to stamp out diversity, equity and inclusion policies, the proposal explains that the federal government considers racial preferences, such as those in admissions policies, to be illegal.
As interpreted by the agency, this proposal would affect “private primary and secondary schools, colleges, universities, professional schools, and trade schools” that have “race-based” programs. By the administration’s own estimate, that could impact 18,000 organizations in the country. That would presumably include many historically Black institutions, as well as other programs that enroll a high share of women and people of color.
However, it would not impact religious schools, according to the agency. “Religious schools may continue to select students based on genuine religious affiliation or membership to remain consistent with existing federal law,” a release from the IRS noted.
If passed, this latest IRS proposal would take effect after May 31, 2027. Public comments will be open through the federal register notice.
Significance: The broad net cast by this proposal is the latest action in a signature pressure campaign for the Trump administration.
On the first day of his second term in office, President Donald Trump issued an executive order labeling DEI policies “radical and wasteful.” Since then, the administration has ramped up efforts to root out these policies, using political pressure to force both private and public institutions to drop DEI, targeting individual companies and universities, even as it has also turned federal grant funding into a cudgel to force compliance. The result has left even advocates sympathetic to diversity feeling forced to distance themselves in order to survive, as a prior Emancipator investigation showed.
Trump has previously pushed for the IRS to revoke Harvard University’s tax-exempt status amid prodding into alleged “racial discrimination” by the university.
The power structure: This tactic has become a pattern for Trump.
At the moment, there’s even a bill called the Protecting the Rights Of Organizations Fairly (PROOF) Act of 2026, seeking to prevent the president from using the IRS as a tool to force acquiescence.
“Donald Trump is attempting to weaponize the IRS and intimidate groups that do not align with his radical political agenda. Therefore, nonprofit organizations like the Southern Poverty Law Center must have due process protections so their tax-exempt status cannot be revoked for political purposes,” said Representative Terri Sewell, D-Texas, in a statement about the bill.
