Trump Weighs Order Targeting Nonprofits as Terrorism-Linked

The proposed order has been under development for months but is unfinished, and Trump could still decide not to sign it. Officials have not publicly identified which organizations might be targeted or how many could face designation.

The plan would rely on Section 501(p), a tax-law clause never before used in this manner. A designation would suspend a group’s tax exemption, make donations to it nondeductible and require it to pay taxes on net income while it challenges the decision in court. Some government evidence could remain classified during that process.

Officials have consulted Internal Revenue Service experts and examined nonprofits’ bank records. In agency discussions near the end of the previous year, White House deputy chief of staff Stephen Miller asked why officials had not pursued inquiries into nonprofits he thought had connections to groups such as antifa.

Treasury Secretary Scott Bessent said in July that officials were examining whether tax-exempt organizations had served as channels for foreign influence or enabled violence, adding that the government would follow the evidence. Federal agencies, including the Treasury Department, have flagged nine organizations for links to terrorism, without a White House designation.

Former IRS official Carolyn Schenck warned that combining enforcement tools around the same organizations could have significant consequences. Former New York assistant attorney general Kevin Frankel said the provision could reach domestic organizations outside existing foreign-terrorism and sanctions systems. A White House official called discussion of a possible order speculative; the IRS and Treasury did not respond to requests for comment.

Trump Weighs Bypassing IRS Protections to Target Nonprofits

The proposal would give the president a powerful new route to punish nonprofits: designate them as tied to terrorism and suspend their tax exemptions. The order remains unfinished, and Trump may not sign it, but officials have spent months preparing it.

Under the plan, groups could lose deductible donations and owe taxes while challenging their designation in court. Unlike the IRS’s normal process, the provision would not require lengthy audits or formal notice, and some government evidence could remain classified. That raises serious concerns about how organizations could defend themselves against a label with potentially devastating financial effects.

Officials have reviewed nonprofit bank records and consulted IRS experts. Stephen Miller pressed colleagues on why they had not done more to investigate organizations he believed were linked to antifa. The administration has not named potential targets, while Treasury Secretary Scott Bessent has described scrutiny of tax-exempt groups as part of efforts to address foreign influence and violence.

A former IRS official warned that the danger lies in combining enforcement tools against the same groups and conduct. The provision could reach domestic organizations beyond existing foreign-terrorism and sanctions systems. A White House official called talk of an order speculative, but the proposed shortcut around ordinary IRS safeguards is already consequential.

Trump Considers Tool to Strip Terror-Linked Groups’ Tax Breaks

Tax-exempt status should not shield organizations that support terrorism or enable violence. Trump is considering an executive order that could use an existing tax-code provision to suspend the exemptions of nonprofits designated as having terrorist ties.

The order is still being developed, and the president could reject it. Officials have examined bank records and consulted IRS experts, while Treasury Secretary Scott Bessent has said the government is looking into whether charitable entities have been used for foreign influence or to enable violence. Nine organizations have already received terrorism-linked designations from federal agencies.

The proposed process could end the tax benefits immediately: donations would no longer be deductible, and a group would owe taxes on net income while it fights the designation in court. The administration has not said which organizations might be affected, and the provision has never been used this way.

Critics warn that applying multiple enforcement tools to the same groups could carry serious consequences, particularly for domestic organizations. But those concerns do not erase the government’s stated interest in following evidence of abuse. A White House official described discussion of a possible order as speculative, leaving the proposal unsettled.