The administration of President Donald Trump is currently evaluating a proposed executive order that would designate certain nonprofit organizations as having ties to terrorism. According to a report published by The Wall Street Journal on Friday, this measure would immediately suspend the tax-exempt status of targeted groups, a move that could severely disrupt their operations.
Sources familiar with the matter indicate that officials have been drafting the order for several months. However, the proposal remains under active deliberation, and it is not guaranteed that President Trump will finalize or sign the document. The specific number of organizations targeted, as well as their identities, have not yet been determined.
A White House official characterized the discussion of the potential order as speculative. This statement contrasts with earlier remarks from April, when the White House told reporters that no such action was being drafted or considered. Neither the Treasury Department nor the Internal Revenue Service responded to the newspaper’s requests for comment regarding the developing policy.
The proposed order would utilize a provision of the tax code that has never previously been employed in this manner. Implementing this mechanism would sharply escalate the administration's scrutiny of tax-exempt entities. Critics and observers suggest the move could impact groups that are political opponents of the President.
Under the new framework, a terror designation would take effect much faster than the standard IRS process for penalizing nonprofits. The usual procedure involves a detailed audit, formal notice of the decision, and the right to challenge that decision in court. The executive order would bypass these lengthy steps, allowing for immediate administrative action.
This development is part of a broader crackdown on nonprofit organizations that has characterized the current administration. Last year, President Trump signed a national security memorandum directing the IRS to ensure that no tax-exempt groups were involved in domestic terrorism or political violence.
In September of this year, the President designated Antifa as a domestic terrorist organization by executive order. This action set a precedent for using executive power to influence the status of organizations perceived as having political or militant leanings.
The Justice Department has also taken legal action against prominent advocacy groups. The department recently indicted the Southern Poverty Law Center, alleging that the organization defrauded donors by secretly paying informants. The Southern Poverty Law Center has denied the charges, maintaining the integrity of its financial practices.
State-level officials are also engaging in efforts to challenge the tax status of major nonprofits. Outgoing Texas Governor Greg Abbott has requested that Treasury Secretary Scott Bessent suspend the tax-exempt status of the Council on American-Islamic Relations. Abbott alleges that the group has ties to terrorist networks, a claim that the Council on American-Islamic Relations has officially denied.
