Bloomberg Tax, Colleges Await Looming IRS Guidance on Race and Admissions:

Private colleges and universities with programs aimed to benefit racial minorities are girding themselves for new rules governing their tax-exempt status after a year of increased scrutiny by President Donald Trump.

The administration, which plans to issue guidance in the next year, has cracked down on what it sees as illegal diversity, equity, and inclusion practices. Universities and other nonprofits have spent the past year understanding the line between illegal and legal DEI initiatives.

The IRS said it will address “the application of fundamental public policy against racial discrimination, including consideration of recent caselaw, in determining the eligibility of private schools for the recognition of tax-exempt status under 501(c)(3).”

The agency may update a 1975 revenue procedure to consider the 2023 Supreme Court ruling in Students for Fair Admissions v. Harvard, which banned universities from considering race in their admissions, said Elinor Ramey, a Lowenstein Sandler partner and former Treasury adviser. The revenue procedure gives guidelines on the requirement that schools must have racially nondiscriminatory policies to qualify for tax-exempt status.

Bloomberg Tax, Trump Takes College Crusade to the Courtroom in Strategic Shift:

President Donald Trump’s administration appears to be retooling its aggressive campaign to reshape elite universities, bringing lawsuits into a fight that it has primarily waged with funding freezes and executive action.

Last year, Trump’s approach centered on applying financial pressure. He suspended billions in federal research dollars across nearly a dozen schools and issued a series of proclamations aimed at squeezing their budgets. The tactics ultimately led to six settlements from colleges collectively pledging hundreds of millions in fines and a bevy of policy changes.

But two of his biggest targets, Harvard University and the University of California Los Angeles , have resisted — and in recent months, both have won back almost all of their research funds in court.

So officials look to be shifting strategies and taking up one of Trump’s favorite cudgels: the lawsuit.

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