Treasury to conduct policy review of tax-exempt status for universities after Trump tweets

Treasury to conduct policy review of tax-exempt status for universities after Trump tweets

Treasury Secretary Steven MnuchinSteven Terner MnuchinLawmakers fear voter backlash over failure to reach COVID-19 relief deal United Airlines, unions call for six-month extension of government aid House Democrats plan to unveil bill next week to avert shutdown MORE anticipates that his department will conduct a review of guidance related to the tax-exempt status of universities after President TrumpDonald John TrumpBiden leads Trump by 36 points nationally among Latinos: poll Trump dismisses climate change role in fires, says Newsom needs to manage forest better Jimmy Kimmel hits Trump for rallies while hosting Emmy Awards MORE tweeted earlier this month that he wanted the department to re-examine schools' tax exemptions.

"Secretary Mnuchin expects that Treasury’s Office of Tax Policy will conduct a policy review of the generally applicable regulations and guidance implicated by the President’s comment," Treasury's deputy general counsel told inspectors general for the department.

The inspectors general relayed the response on Friday to House Ways and Means Committee Chairman Richard NealRichard Edmund NealRep. Cedric Richmond set to join House Ways and Means Committee Coons beats back progressive Senate primary challenger in Delaware Pelosi: House will stay in session until agreement is reached on coronavirus relief MORE (D-Mass.).


Trump on July 10 asked Treasury to look into universities' tax-exempt status, arguing that many institutions "are about Radical Left Indoctrination, not Education." The president's tweets came as he was pressing schools to physically reopen in the fall.

"Too many Universities and School Systems are about Radical Left Indoctrination, not Education," Trump tweeted. "Therefore, I am telling the Treasury Department to re-examine their Tax-Exempt Status and/or Funding, which will be taken away if this Propaganda or Act Against Public Policy continues."

The tweets drew concerns from Neal, who called for oversight of Trump's demand. Neal noted in letters to the IRS and to Treasury's inspectors general that under the federal tax code, it is unlawful for the president to request that the IRS investigate specific taxpayers.

Treasury's Office of the Inspector General and the Treasury Inspector General for Tax Administration (TIGTA) told Neal on Friday that according to Treasury's deputy general counsel, Treasury has referred the portion of Trump's tweets relating to higher education funding to the Education Department. The deputy general counsel also said that to the best of the general counsel office's knowledge, no one has been directed to investigate any particular school.

TIGTA told Neal that IRS officials said that they had not been directed to investigate the tax-exempt status of any specific universities or school systems.


Both of the inspector general offices said that they had not initiated investigations related to the tweet, but the Office of the Inspector General said it would monitor developments in the Treasury tax policy office.

Neal expressed disappointment with the responses from the inspectors general.

"The President’s tweets on this matter were completely out of line. It’s disappointing that the Treasury Inspector General for Tax Administration and the Treasury Office of Inspector General appear to have asked Treasury and IRS to investigate themselves, and are taking their assertions at face value without further investigation," Neal said in a statement. "I expected them to do more. Despite these limited findings, I will remain vigilant on this matter."

Bloomberg Tax first reported on the inspectors general letters.