Associations are growing nervous because of recent comments by President Donald Trump and others in the Administration suggesting the targeting of some organizations’ tax-exempt status based on their missions or activities. As reported in an April 17, 2025 article in The Hill, for example, Trump told reporters that some nonprofit organizations’ tax-exempt status could be removed. The article quotes Trump as stating that the tax-exemption of immigrant rights groups or environmental rights groups “could be” on the table. He singled out by name a nonpartisan, nonprofit organization with 501(c)(3) status that advances ethics in government and that has been critical of Trump.
Trump's remarks to reporters came in the same week that, according to a report by The Washington Post, the Internal Revenue Services' (IRS) acting general counsel received a request from the Treasury Department that the agency revoke Harvard University’s tax-exempt status, following Harvard’s public refusal of the Trump administration’s demand the university agree to oversight of its curriculum and faculty hiring, among other measures. Trump also posted on Truth Social that “Perhaps, Harvard should lose its tax-exempt status and be taxed as a political entity if it keeps pushing political, ideological and terrorist-inspired/supporting ‘sickness?’ Remember, tax-exempt status is totally contingent on acting in the PUBLIC INTEREST!”*
The president and other executive branch officials are barred by statute from “request[ing], directly or indirectly” that the IRS audit or investigate any particular taxpayer; a White House spokesperson stated that IRS “investigations into any institution’s violations of its tax status were initiated prior to the president’s” post. Others outside of the executive branch, however, may file complaints with the IRS about the tax-exempt status of organizations, as the American Alliance for Equal Rights (“AAER”) did on April 1, 2025, against the Gates Foundation and two other tax-exempt foundations. AAER’s complaints alleged that the foundations have unlawfully excluded “white Americans” from benefits and opportunities based on their race and requested that the IRS open an investigation into the activities and tax-exempt status of the foundations. Last year, AAER received a favorable ruling in its lawsuit against the Fearless Foundation, a nonprofit foundation that issued grants reserved for small businesses owned by Black women. The U.S. Court of Appeals for the 11th Circuit held that AAER was likely to succeed in its claim that the grant contest violated the federal prohibition in 42 U.S.C. § 1981 against race discrimination in making and enforcement of contracts, even though the grants were designed to correct a manifest racial imbalance in access to capital for Black women-owned businesses.
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*Grammatical corrections related to capitalization and punctuation corrected by OSAP.