Treasury, IRS Weighing Plan for Politically Motivated Actions Against Nonprofits

What happened:
Treasury and the IRS are reportedly considering a draft plan to launch a “sweeping audit” of foundations and other nonprofits the administration disfavors, based on claims that the organizations operate with a “substantial illegal purpose.” Under the draft, the audit could lead to revocation of tax-exempt status or significant fines. Organizations reportedly named as targets include Open Society Foundations, the Southern Poverty Law Center, the Council on American-Islamic Relations, the Private Equity Stakeholder Group, and the labor union SEIU.

Why it matters:
Senate Finance Committee Chair Ron Wyden (D-OR) and Sen. Raphael Warnock (D-GA) sent letters to Treasury Secretary Bessent and IRS Commissioner Bisignano requesting information about the plan and directing the agencies to preserve all related records. NCN has called it “an egregious abuse of power” for any administration — regardless of party — to use the IRS to target nonprofits it disfavors. The concern for the sector isn’t limited to the organizations named: the enforcement tools being built here could be turned on any nonprofit under a future administration, on either side of the aisle.

Where things stand:
No final decision has been announced. This is a more concrete, named-target escalation of the broader pattern PANO’s recent threats recap described in general terms. PANO will continue monitoring and will alert members if the scope broadens.

=========================================================================================================Photo by Steve Buissinne from Pixabay.