The Trump administration is reportedly preparing a significant crackdown on several prominent left-leaning nonprofit organizations, including George Soros’ Open Society Foundations, the Southern Poverty Law Center (SPLC), and the Council on American-Islamic Relations (CAIR). Treasury Secretary Scott Bessent and the IRS are considering revoking the tax-exempt status of these groups, according to three sources familiar with the matter. This initiative is described as part of a broader effort to target "bogus" charities that allegedly abuse the U.S. tax code.
Officials are reportedly developing a plan that could strip non-compliant organizations of their 501(c)(3) status, potentially leading to substantial back payments and civil penalties. The move is said to draw on a 2025 executive order signed by former President Donald Trump aimed at nonprofits operating with a "substantial illegal purpose," which could allow the IRS to issue fines or revoke tax-exempt status for charities allegedly linked to political violence, protests, or radical ideologies.
Several anti-corporate and labor-aligned advocacy groups, such as the Private Equity Stakeholder Project, the Athena Coalition, MediaJustice, and the Strategic Organizing Center with its parent union SEIU, are also reportedly under scrutiny and could be added to a blacklist. One source indicated that there is internal pressure to expedite these actions, with expectations that the IRS will increase its pace.
The effort is already facing legal challenges. Protect Democracy, a progressive legal organization, has sued the Treasury Department and the IRS, alleging that the administration is improperly using the tax code against political opponents and violating the First Amendment rights of charities. Some officials are reportedly pushing for enforcement before the midterm elections, while others advocate for delaying formal action to avoid protracted legal battles.
Revoking a group's 501(c)(3) status is typically a lengthy process involving extensive IRS audits, administrative appeals, and potential court battles. To aid in the review of nonprofits, Bessent has enlisted Tony Saffier, a former special operations veteran and AI executive, to lead an interagency task force.
Penalties under consideration range from fines to the complete loss of tax-exempt status, which would subject these organizations to the standard 21% federal corporate tax rate. For the 2024 tax year, the Open Society Foundations would have owed an estimated $163.6 million, the SPLC approximately $354,000, and 17 CAIR chapters about $860,000 if taxed at this rate.
The administration is reportedly leveraging specific controversies associated with each target. The Open Society Foundations, now chaired by Alexander Soros, funds initiatives related to diversity, climate change lawsuits, and support for undocumented migrants. A spokesperson for the Soros nonprofit stated that threatening tax status for political reasons would be an illegal attempt to stifle work the administration opposes. Bessent previously worked for George Soros, leading global currency bets for Soros Fund Management.
The Open Society Foundations have provided past financial backing to groups such as Black Lives Matter, the US Campaign for Palestinian Rights, and United We Dream Action. The SPLC is reportedly facing scrutiny due to the recent federal indictment of its former intelligence director, who allegedly funneled funds to extremist informants tied to the 2017 Charlottesville rally. CAIR is being targeted as a national security concern, with federal prosecutors having named it as an unindicted co-conspirator in a 2007 terror-financing trial, though CAIR denies any links to illicit foreign funding or terror organizations.
Experts note that the potential loss of tax exemption is a significant threat, but bank de-risking and donor hesitation may pose more immediate financial risks. There is also concern among some that expanding executive power to target specific groups sets a dangerous precedent for future administrations.