Tax-exempt status means that qualified not-for-profit organizations are exempt from paying federal income and property taxes. It also enables donors to nonprofits to potentially deduct their contributions. Recently, President Trump called for the IRS to rescind Harvard University’s tax-exempt status. Historically, both Republicans and Democrats have declared that certain nonprofits should lose their exemptions. But revocation is rare for organizations that adhere to their charitable purpose and follow other IRS rules. In addition, federal law prohibits executive branch officials from directing the IRS to investigate or audit exempt organizations.
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