Attorney General Bonta Co-Leads Letter Opposing Trump’s Attack on Private Schools’ Tax-Exempt Status Over Diversity, Equity, and Inclusion Policies

OAKLAND — California Attorney General Rob Bonta co-led a coalition of 20 attorneys general in submitting a comment letter opposing an Internal Revenue Service (IRS) proposed rule that would revoke tax-exempt status for thousands of private schools with diversity, equity, and inclusion-related policies and programs. The proposed rule would allow the IRS to deny or revoke the tax exemption of certain K-12 schools, colleges, universities, or professional schools with policies that the Trump Administration deems inconsistent with its executive orders and political aims. Doing so threatens educational outcomes, scholarships, loans, athletics, and donors’ protected speech. In the letter, Attorney General Bonta and the coalition argue that this proposed rule undermines civil rights law and core equal protection principles.

“With this proposed rule, the Trump Administration is punishing private schools for promoting equal opportunity and programs that ensure all students can grow and achieve their dreams without roadblocks. Not only is this unconstitutional, but it also harms thousands of schools’ philanthropic work that helps students succeed," said Attorney General Bonta. “Once again, President Trump is using unlawful excuses to play political games with America’s promise of a good education. Learning and liberty go hand in hand, which is why my fellow attorneys general and I will continue to stand up against Trump’s anti-American orders.”  

BACKGROUND

Across the country, private K-12 schools, universities, and other educational organizations receive the benefits of federal tax-exempt status with the IRS for operating exclusively for charitable or educational purposes. This status allows private schools to attract tax-deductible donations, grants, and other benefits that ultimately allow educational institutions to fund programs, scholarships, and boost educational outcomes for Americans. Currently, the IRS’s Revenue Procedure allows private schools to have a policy that promotes the establishment and maintenance of a school’s racially nondiscriminatory policy with respect to admissions, facilities and programs, and financial assistance. Nevertheless, according to the Trump Administration’s own estimate, the proposed regulations may change this for thousands of private schools by reshaping higher education to conform with the administration’s orders and political agenda.  

This proposed rule represents another attack in a long list of attempts to dismantle race-based and equity-centered policies. This change, if finalized, would continue that trend of furthering political and cultural aims, regardless of the illegality of the proposal. The proposed rule acknowledges that private schools may incur some legal and administrative costs but fails to acknowledge the breadth and depth of the costs and other burdens. The change would also place restrictions on donors’ protected speech with an arbitrary and capricious rule that modifies donor intent. 

In the comment letter, Attorney General Bonta and the coalition explain that the IRS’s proposed rule is in violation of the law because:

• It subverts civil rights law and equal protection principles;
• It would place severe burdens on the impacted private schools, states’ attorneys general, the courts, and donors to modify charitable gifts; and
• It violates the federal Administrative Procedure Act and case law on the issuance of federal administrative regulations under Loper Bright Enterprises v. Raimondo (2024) 603 U.S. 369.  

In submitting the comment letter, Attorney General Bonta, Massachusetts Attorney General Andrea Joy Campbell, Minnesota Attorney General Keith Ellison, and New York Attorney General Letitia James co-lead the attorneys general of Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Michigan, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia.