The Internal Revenue Service is making plans to rescind the tax-exempt status of Harvard University, according to two sources familiar with the matter, which would be an extraordinary step of retaliation as the Trump administration seeks to turn up pressure on the university that has defied its demands to change its hiring and other practices.

The Trump administration on Monday froze $2.2 billion in federal funding for Harvard after the school refused to agree to a list of White House demands.

The Trump administration is moving to revoke Harvard University’s tax-exempt status, a designation that has allowed the Ivy League school, like the vast majority of universities, churches and charities,