2026-19013Proposed RuleWallet

IRS to Tax Racist Schools? Public Hearing Set for Outrage

Published Date: 9/16/2026

Proposed Rule

Summary

This document provides a notice of public hearing on the notice of proposed rulemaking (REG-119986-25) published in the Federal Register on September 4, 2026. The proposed regulations would update existing regulations to provide that a private school is not described as an organization exempt from Federal income tax if it discriminates on the basis of race, color, or national or ethnic origin in administration of its educational, admissions, scholarship, athletic, or other policies, based on the fundamental public policy of the United States against such practices.

Analyzed Economic Effects

1 provisions identified: 0 benefits, 1 costs, 0 mixed.

Tax-Exempt Loss for Discriminating Schools

The proposed regulation would make a private school ineligible for Federal income tax exemption if it discriminates on the basis of race, color, or national or ethnic origin in administering its educational, admissions, scholarship, athletic, or other policies. This is a change proposed in REG-119986-25 (published September 4, 2026) and remains a proposed rule subject to the rulemaking process.

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Key Dates

Published Date
9/16/2026

Department and Agencies

Department
Independent Agency
Agency
Treasury Department
Internal Revenue Service
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