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The Trump administration is preparing a broad review of nonprofit organizations that officials believe may be abusing federal tax-exempt rules, with George Soros’ Open Society Foundations, the Southern Poverty Law Center and the Council on American-Islamic Relations among the groups reportedly facing scrutiny.
By yourNEWS Media Newsroom
The Trump administration is preparing an expansive review of nonprofit organizations that officials believe may be improperly benefiting from federal tax exemptions, potentially putting some of the country’s most prominent advocacy groups at risk of audits, financial penalties and eventual loss of their 501(c)(3) status.
George Soros’ Open Society Foundations, the Southern Poverty Law Center and the Council on American-Islamic Relations are among the organizations being examined, according to three people familiar with internal Treasury Department discussions cited Thursday by the New York Post.
Treasury officials are developing a framework for reviewing organizations they believe have abused provisions of the federal tax code, according to the report.
Two people familiar with the planning said members of Treasury Secretary Scott Bessent’s inner circle are working on a blueprint that could ultimately lead to the revocation of tax-exempt status for organizations found to be noncompliant.
Such findings could also expose affected nonprofits to substantial back taxes and civil penalties.
The effort relies in part on a 2025 executive order signed by President Donald Trump addressing nonprofit organizations that operate with what the administration described as a “substantial illegal purpose.”
According to the Post, the order created a basis for increased scrutiny of charities accused of involvement with political violence, disruptive protests or radical ideological activity and could lead to IRS fines or revocation proceedings.
The potential review extends beyond Open Society Foundations, the SPLC and CAIR.
Officials have also examined a number of anti-corporate and labor-aligned organizations, according to the three sources.
Those groups include the Private Equity Stakeholder Project, the anti-Amazon Athena Coalition, MediaJustice and the Strategic Organizing Center, along with its parent union, the Service Employees International Union.
No final determination has been reported regarding which organizations will ultimately face enforcement proceedings.
The initiative has already prompted litigation from groups concerned that federal tax enforcement could be used for political purposes.
Protect Democracy filed a lawsuit against the Treasury Department and IRS seeking records related to reports that the administration may be considering investigations of nonprofits viewed as political adversaries.
The organization has raised questions about whether the administration could circumvent federal safeguards designed to keep partisan considerations out of tax enforcement.
Treasury declined multiple requests from the Post for comment on the developing initiative.
Bessent, however, publicly confirmed in October 2025 during an appearance on the “Charlie Kirk Show” that work had begun on compiling a list of organizations for review.
Treasury oversees the Internal Revenue Service, placing Bessent in a central position as the administration considers whether charitable and advocacy organizations are complying with the requirements governing tax-exempt entities.
Any effort to formally revoke an organization’s 501(c)(3) designation would likely be lengthy.
According to the Post, the process can take years and typically involves an IRS examination, administrative appeals within the agency and, potentially, litigation before federal tax courts.
Bessent has enlisted Tony Saffier, a former special operations veteran and artificial intelligence executive who was recently selected to lead an interagency task force, to assist with the effort, according to the report.
Potential consequences could range from corrective penalties to full revocation of tax-exempt status.
An organization that loses its exemption could become subject to the standard 21% federal corporate income tax rate.
The Post calculated that Open Society Foundations, the Southern Poverty Law Center and 17 CAIR chapters collectively could have faced approximately $165 million in federal income taxes for 2024 had their reported income been taxable at the 21% corporate rate.
That figure was hypothetical and did not represent an existing tax assessment.
The newspaper attributed nearly all of the estimated amount to the Soros network, calculating a possible tax liability of approximately $163.6 million.
It estimated that the SPLC would have owed about $354,000 under the same calculation, while 17 CAIR chapters would collectively have faced roughly $860,000.
Open Society Foundations rejected the prospect of politically motivated tax enforcement.
“Threatening any nonprofit’s tax status for political reasons would be nothing more than an illegal attempt to target and stifle work that the administration disagrees with,” a spokesperson for the Soros organization told the Post.
Administration officials are reportedly approaching the organizations under different rationales.
According to the Post, Open Society Foundations and the SPLC are being examined primarily as part of the domestic nonprofit initiative, while officials are treating CAIR as a national security matter.
The SPLC is also involved in a separate federal criminal case.
The organization is under federal indictment on charges that include wire fraud, making false statements and conspiracy to commit money laundering.
Heidi Beirich, the former director of the SPLC’s Intelligence Project, was also recently charged in connection with the case.
Federal prosecutors allege that the SPLC secretly directed donor money to informants operating inside extremist organizations.
One of those informants, according to prosecutors, participated in an online leadership group associated with planning the violent 2017 Unite the Right rally in Charlottesville, Virginia.
The SPLC has denied wrongdoing.
The organization has said its informant program was intended to penetrate extremist groups, protect SPLC employees and collect intelligence, some of which was provided to law enforcement authorities.
CAIR has faced separate scrutiny for years over allegations involving Hamas, which the United States designates as a foreign terrorist organization.
Federal prosecutors previously identified CAIR as an unindicted co-conspirator in the Holy Land Foundation terror-financing prosecution.
CAIR has strongly denied maintaining ties to terrorist organizations or receiving illicit foreign funding.
The possibility of losing tax-exempt status may not be the most immediate risk facing organizations subjected to a high-profile federal investigation, according to Samuel Handwerger, a tax policy professor at the University of Maryland.
“If I were assessing real-world exposure for these organizations, I would rank it: bank de-risking first, donor and grant maker chill second, examination costs third, and actual revocation a distant fourth,” Handwerger told the Post.
A government investigation alone could cause financial institutions, donors or grant-making organizations to reconsider their relationships with targeted nonprofits before any formal IRS determination is reached.
Handwerger also cautioned that using executive authority to scrutinize particular organizations could create consequences extending beyond the current administration.
“Every administration inherits the precedents of the last one,” he said. “Organizations across the political spectrum have an interest in the answer [to this question], and many of them have not yet noticed that.”
The administration’s initiative therefore could develop along two tracks: the technical question of whether individual organizations comply with federal nonprofit law and a broader legal dispute over how far a presidential administration may go in directing scrutiny toward specific tax-exempt groups.
For the organizations reportedly under consideration, any formal loss of 501(c)(3) status would likely come only after a lengthy administrative and judicial process.
But the Treasury Department’s developing framework signals that the administration is preparing to test whether nonprofits it considers improperly structured or engaged in prohibited conduct should continue receiving favorable treatment under the federal tax code.
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