House Committees Ask IRS to Investigate Nonprofits Opposing AI Data Centers

What happened:
On September 22, House Ways and Means Chair Jason Smith (R-MO) and House Select Committee on China Chair John Moolenaar (R-MI) sent a letter to Treasury Secretary Bessent and IRS CEO Bisignano. They asked the IRS to investigate whether several nonprofits with alleged ties to the Chinese Communist Party violated their tax-exempt status by advocating against AI data center construction.

Why it matters for Pennsylvania nonprofits:
Data center siting is one of the most active issues in Harrisburg (see State item 4), and environmental, community, and civic nonprofits are engaged in local fights across the Commonwealth. Advocacy on legislation and local land-use decisions is lawful for 501(c)(3)s within lobbying limits. The letter extends a pattern of congressional scrutiny of nonprofits based on their advocacy positions, following the House Oversight Task Force launched in May.

What nonprofits can do:
Keep documentation of funding sources, lobbying expenditures, and board oversight current. Useful resources: Protect Democracy’s toolkit for organizations facing government investigations and the U.S. Center for Nonprofit Law’s tracker of congressional investigations.

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