Revoking Harvard's tax-exempt status would heavily impact financial aid programs and research projects, as tax exemptions allow more funds to be directed toward scholarships, medical research, and innovation. The university stated it provided $749 million in financial aid in FY2024, and losing exemptions could reduce support for students and halt critical research.

Harvard sued the administration after $2.2 billion in federal grants and contracts were frozen, calling the move unlawful. The university asserts that federal law prohibits unilateral IRS action against specific taxpayers and emphasizes its historical tax exemption to support educational missions.

Trump conditioned federal funding on Harvard discontinuing DEI programs, stating they promote 'political, ideological, and terrorist-inspired' ideologies. Harvard recently renamed its DEI office, suggesting a potential policy shift amid pressure.

Federal law prohibits Trump from 'indirectly or directly' influencing IRS audits of specific taxpayers, including Harvard. Experts note that IRS revocation requires proving violations of tax-exempt criteria, such as unlawful political activity.

The article does not detail specific steps by Harvard to address antisemitism beyond its legal challenge to funding cuts. Trump's threats cite antisemitism as justification, but Harvard's spokesperson has focused on defending its tax-exempt educational mission.