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IRS, Treasury Propose Cutting Tax-Exempt Status For Schools With Diversity Policies
Authored by Jack Phillips via The Epoch Times,
The Trump administration is proposing a new rule that would strip private colleges and schools of their tax-exempt status if those institutions engaged in racial discrimination through policies such as diversity, equity, and inclusion (DEI).
The U.S. Treasury Department and the Internal Revenue Service said on Thursday that a proposed rule would bar a private school from obtaining tax-exempt status under section 501(c)(3) of the U.S. tax code if the school "adopts, maintains, or enforces a policy or practice that discriminates on the basis of race, color, or national or ethnic origin."
Under the new regulation, which would take effect in May 2027, a broad range of programs administered by schools would be affected. They include admissions, policies, loans, scholarships, and athletics, said the Treasury Department in a news release.
The proposal may impact as many as 18,000 private educational institutions across the United States, the IRS and Treasury estimated.
"This administration is standing up for America's students by ensuring racial discrimination has no place in American education," said Treasury Secretary Scott Bessent in a statement.
"Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature."
The proposal, he added, would "establish a clear standard" for private schools to follow, warning that any institution that continues to "use discriminatory practices will no longer receive the benefits of federal tax-exempt status."
The move by the Treasury is another attempt to put pressure on schools and colleges to drop DEI policies that had become common before President Donald Trump returned to the White House. Trump officials have said the policies discriminate against white and Asian American students.
On his first day in office in his second term last year, Trump signed an order ending a number of DEI-related policies implemented under the Biden administration.
Last year, the Trump administration threatened to revoke Harvard University's tax-exempt status during a battle with the nation's oldest college. In a response, Harvard officials said there was no legal basis for doing so and argued it would force cuts to financial aid and crucial medical research.
To maintain nonprofit status, which allows donations to be tax-deductible, organizations must follow IRS rules on lobbying, political campaign activity, and annual reporting requirements, as well as other obligations.
The IRS says on its website that 501(c)(3) organizations also cannot be operated or organized for the benefit of private interests and that their net earnings cannot "inure to the benefit of any private shareholder or individual."
IRS Chief Executive Officer Frank J. Bisignano said private schools that promote discriminatory practices will no longer be exempt from taxes.
"Today's proposed regulations put institutions on notice and schools that continue to engage in racial discrimination should expect to lose that status," he said in a statement on Thursday.
Religious private schools will still be able to maintain a "religious mission, curriculum, or program of religious observance" under the latest proposal, the Treasury Department said.
It added that those schools can continue to select students based on religious affiliation or membership, provided they follow guidelines consistent with federal law.
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Argentina's Milei Escalates Falklands Dispute With Oil Sanctions On UK, Israeli Firms
Argentina's President Milei has announced plans to sign a decree sanctioning companies working on oil exploration of the Falkland Islands, coming a mere days after President Trump indicated that the US position on the archipelago was "under review".
The Libertarian-Right firebrand leader proclaimed quite provocatively that "The Falkland Islands are Argentinian, historically and legally. There is no debate" and added that the "winds of change" have more lately favored Argentina's claim.
Milei characterized the Falkland's Sea Lion Project, which is based out of what firmly remains a British territory, as essentially a resource-grab which undermines Argentinian sovereignty.
via photojetThe area to be tapped lies some 140 miles north of the Falkland Islands and is widely estimated to hold a whopping 1.7 billion barrels of oil.
The ambitious project involves Israeli and British firms, creating rare tensions between staunchly pro-Israeli Milei and what are primarily Tel Aviv-based investors.
He further warned that given the project has proceeded without Argentina's permission, it marks a "concrete and urgent danger," given that "If we fail to act, within a few months, they will possess the physical capacity to take the oil reserves that lie beneath our waters."
According to more on ownership details via Reuters:
The project's two owners have strong Israeli ties. Sea Lion is operated by Tel Aviv-listed Navitas Petroleum (NVPTp.TA), which holds a 65% stake.
Gideon Tadmor, a prominent figure in Israel's energy sector and also the company's chair, holds about 9% of shares in the company, according to LSEG data.
The remaining 35% of Sea Lion is owned by London-listed Rockhopper Exploration (RKH.L), with Israel-based Noked Capital, Brosh Funds and ION Fund Management among its top five investors, owning between 4.6% and 9.2% each.
Navitas and Rockhopper said the Sea Lion project had valid licenses and that they did not expect Milei's comments to have a material effect on the project's development.
Navitas is charging ahead, indicating in its statement that it won't bow to Argentine pressure and that it's done everything correctly and legally.
"The Partnership operates pursuant to valid petroleum licences lawfully granted to it by the Government of the Falkland Islands, a self-governing UK Overseas Territory, and with the full and ongoing support of the UK Government," Navitas said.
The Falklands remain a unique pressure point for Britain, which fought a war over the islands in the early 1980s. The United Kingdom has controlled it going all the way back to 1833.
However, Trump's recent signaling that he'll reconsider the US' position on the Falklands appears to be a big lever over London, and of course there's the reality that Trump's alignment with Milei is tighter than ever.
'If we allow it, we create incentive for British govt to DEEPEN its occupation' — Argentina's Milei opposes Falkland Islands 'Sea Lion' oil project pic.twitter.com/M8JmqMr5H4
— RT Intl (@RT_on_X) September 4, 2026Recent reporting in The Telegraph said the Trump administration is using Britain's sovereignty over the Falkland Islands ultimately as leverage to pressure the European ally into meeting NATO's new defense-spending target.
Back in April, Milei proclaimed on X in Spanish that "The Malvinas were, are, and always will be Argentine" - using the Argentine name for the islands. He also told media outlets at the time that his government is doing "everything humanly possible" to return the Falklands to Argentina.
Tyler Durden Fri, 09/04/2026 - 15:20