IRS to bar tax-exempt status for discriminatory private schools
Private schools that discriminate on race, color, or national origin could lose federal tax exemption after the proposed rule takes effect.
The Internal Revenue Service issued a notice of proposed rulemaking (REG-119986-25, RIN 1545-BS05) that would amend 26 CFR 601.601(a)(3) to state that a private school is not an organization exempt from federal income tax if it discriminates on the basis of race, color, or national or ethnic origin in any educational, admissions, scholarship, athletic, or related policy.
A public hearing on the proposal is set for December 2, 2026 at 10:00 a.m. Eastern Time and will be conducted by teleconference only. Speakers must submit outlines of their topics by November 3, 2026; if no outlines are received, the hearing will be cancelled.
Testifiers are allotted ten minutes each. To request a telephone number and access code, individuals must email the Publications and Regulations Section with the subject line containing the regulation number and the phrase "TESTIFY Telephonically." Those who wish to attend without testifying must use the subject line "ATTEND Hearing Telephonically." Attendance requests must be received by November 30, 2026. An agenda will be posted on regulations.gov after the outline deadline.
The hearing will be accessible to people with disabilities; requests for special assistance must be submitted by November 27, 2026. For questions about testifying, attending, or the proposed regulations, contact the Office of Associate Chief Counsel at (202) 317-6000 or the Publications and Regulations Section at (202) 317-6901 or via the protected email address provided in the notice.
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