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ARTICLE · 18 FEBRUARY 2026

Policing Ideology Through The Tax Code? Executive Power, Nonprofits, State Resistance

Benesch, Friedlander, Coplan & Aronoff LLP
Benesch, Friedlander, Coplan & Aronoff LLP
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The White House has threatened to revoke the tax-exempt status of certain liberal nonprofits by designating them as supporting terrorism...

United StatesGovernment, Public Sector
Kevin Frankel
Kevin Frankel
Zachary Cobb
Zachary Cobb
Yesul (“Kristin”) Lee
Yesul (“Kristin”) Lee
Matthew Wulf
Matthew Wulf
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Key Takeaways

  • The White House has threatened to revoke the tax-exempt status of certain liberal nonprofits by designating them as supporting terrorism or political violence, prompting Democratic-led states to enact laws and issue statements to protect these organizations from politically motivated federal action.
  • Nonprofits now face heightened legal uncertainty and risk of politically driven IRS scrutiny, especially as federal executive orders and memoranda push the boundaries of traditional tax enforcement. The patchwork of state and federal responses creates compliance and funding challenges for organizations operating nationwide.
  • Nonprofits should proactively review their activities and tax filings, consult legal counsel to assess compliance risks and stay informed about evolving federal and state regulations to safeguard their tax-exempt status and eligibility for public funding.

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