Treasury and IRS proposed stripping tax-exempt status from 18,000 private schools over race-conscious policies
On September 3, 2026, the U.S. Department of the Treasury and the Internal Revenue Service issued proposed regulations (IR-2026-103) that would end Section 501(c)(3) tax-exempt status for private schools, colleges, and universities that adopt, maintain, or enforce race-conscious policies in admissions, scholarships, athletics, or other programs, including policies framed as diversity, equity, or inclusion. Treasury estimated the rule could affect as many as 18,000 institutions and cited Bob Jones University v. United States and Students for Fair Admissions v. Harvard as legal basis; the rule would take effect for taxable years beginning May 31, 2027 or later.
