Attorney General Ellison opposes Trump attack on tax-exempt status for private schools with non-discrimination policies

AG Ellison co-leads opposition to proposed IRS rule that would deny or revoke tax exemption to as many as 18,000 private primary and secondary schools, colleges, universities, professional and trade schools if they maintain racial non-discrimination policies

Would also arbitrarily and capriciously modify intent of donors who fund scholarships and place restrictions on donors’ protected speech, and burden states’ enforcement of charities laws

November 6, 2026 (SAINT PAUL) — Minnesota Attorney General Keith Ellison has co-led a coalition of 20 attorneys general in opposing a proposed Internal Revenue Service (IRS) rule that would revoke tax-exempt status for up to 18,000 private schools with racial non-discrimination policies. 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 politically disfavors. In a comment letter to the IRS, Attorney General Ellison and the coalition argue that doing so threatens educational outcomes, scholarships, loans, athletics, and donors’ protected speech, and undermines civil rights law and core equal-protection principles.

“Once again, the Trump Administration is trying to hijack levers of government that should be neutrally and fairly administered to advance its extremist political agenda and punish its perceived enemies,” Attorney General Ellison said. “President Trump’s special hatred of policies designed to reverse the effects of centuries of racial discrimination comes through loud and clear in this proposed rule. One particularly insidious impact of it is how it would undermine private schools’ legal obligations to honor and protect the intent of donors who fund scholarships to help undo the legacy of racial discrimination. I’ve helped lead this coalition of attorneys general to oppose this rule because we must stand up for the legality and constitutionality of the fight against discrimination and racism — and stand up against Trump’s weaponization of our own government against us.”

Across Minnesota and 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 tax-exempt 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.

Although the Trump Administration acknowledges that private schools, colleges, and universities may incur some legal and administrative costs under the proposed rule, it notably fails to acknowledge the breadth and depth of the costs and other burdens. One significant burden is the arbitrary and capricious modifications the proposed rule would make to the intent of donors who fund scholarships and the restrictions it would place on donors’ protected speech, which would also burden the states’ enforcement of charities law. In August 2025, Attorney General Ellison co-led another coalition of 10 attorneys general in issuing guidance on the rights and responsibilities of entities holding charitable scholarship funds for the benefit of members of protected classes such as race, religion, and gender, advising those entities not to comply in advance with Trump Administration threats.

In the comment letter, Attorney General Bonta and the coalition explain that the IRS’s proposed rule violates 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.  

Joining Attorney General Ellison in submitting the comment letter are the attorneys general of California, Massachusetts, and New York, who led the coalition along with Attorney General Ellison, and the attorneys general of Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Maine, Maryland, Michigan, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Virginia, and Washington.