The Trump administration is considering an executive order that would allow the federal government to identify specific nonprofit organizations as having ties to terrorism. According to a report by The Wall Street Journal on November 6, 2026, the proposal would utilize an untested provision of the tax code to immediately suspend the tax-exempt status of designated groups. A White House official described the discussions as speculative and noted that reporters were told in April that such an order was not under consideration.
This proposal follows previous efforts by the administration to increase scrutiny of nonprofit entities. Last year, the president signed a memorandum directing the Internal Revenue Service (IRS) to monitor tax-exempt groups for involvement in domestic terrorism. Additionally, Stephen Miller, who was named as the next White House chief of staff on November 6, 2026, previously requested more aggressive investigations into groups he alleged had terrorism ties.
The proposed order would bypass the standard IRS process for investigating tax violations, which typically involves a longer period for review and the imposition of penalties. The Wall Street Journal reported that the plan has been under discussion for several months and could result in immediate financial consequences for affected organizations. The report follows the November 3, 2026, midterm elections, in which the Democratic Party gained control of both the House of Representatives and the Senate.
For the organizations involved, the day-to-day impact would include the potential loss of funding sources, as the removal of tax-exempt status often discourages charitable giving. The Wall Street Journal reported that the suspension of this status could be immediate upon designation, meaning groups could notice changes to their financial standing and tax liabilities shortly after the order is signed and implemented. This sets a precedent for using the tax code as a tool for national security designations, shifting enforcement from traditional legal or regulatory channels to direct executive action.
The specific date for a final decision on the executive order has not been reported. It is also not yet known which specific organizations would be placed on the list or what legal challenges might arise following a designation. The Southern Poverty Law Center, a nonprofit civil rights organization, was recently indicted by the Justice Department on allegations of defrauding donors by concealing payments to informants, which the group denies. What happens next depends on whether the administration proceeds with the order and how the new Democratic-led Congress responds after taking office.