"US considers designating some NGOs as terrorism-linked organizations...promotes suspension of tax exemption status"

The Wall Street Journal (WSJ) reported on the 6th (local time) that the U.S. Donald Trump administration is considering designating some non-governmental organizations (NGOs) as terrorist-related organizations and immediately suspending their tax-exempt status.

If the executive order is implemented, the organization's tax exemption benefits can be suspended without going through the normal investigation and review procedures of the Internal Revenue Service (IRS), which could cause a significant blow to its finances and operations.

According to reports, Trump administration officials have been preparing an executive order with this content for several months.

However, it is in the review stage and has not yet been finalized or signed by the President.

The Trump administration is said to have consulted with IRS experts and examined related data, such as bank transaction records of non-profit organizations, to review the feasibility of implementation.

The WSJ reported that the Federal Bureau of Investigation (FBI), IRS, and Treasury have been jointly investigating some groups for links to terrorism since last year.

A plan being considered would be to use Section 501(p) of the federal tax code to designate some nonprofit organizations as organizations that engage in terrorist activities or support terrorism.

If the measure is implemented, the tax-exempt status of these organizations will be automatically suspended. In addition, since donations cannot be deducted from income, it becomes difficult to attract donations, which can result in a significant financial hit.

Generally, for the IRS to revoke a non-profit organization's tax-exempt status, it must go through procedures such as investigation and official notification, but if there is an executive order, immediate suspension is possible in connection with the designation related to terrorism.

For this reason, organizations subject to designation may have to file lawsuits against the government's decision, and may also face difficulties in taking legal action if the basis for designation includes confidential information.

So far, there have been nine organizations whose tax-exempt status has been suspended due to designation as targets of sanctions by the federal government, but there has been no case where their tax-exempt status has been suspended through direct designation by the President.

The Trump administration and its allies have been increasing pressure on nonprofit organizations.

The Justice Department has indicted the Southern Poverty Law Center (SPLC), a progressive nonprofit organization, on charges of defrauding donors by secretly paying informants.

Additionally, Republican lawmakers on the House Ways and Means Committee have called for an investigation into groups suspected of being linked to foreign terrorist groups.

Texas Governor Greg Abbott sent a letter to Treasury Secretary Scott Besant at the end of last year, raising suspicions about the Council on American-Islamic Relations (CAIR)'s links to terrorism and requesting the suspension of its tax exemption status.

These organizations deny the allegations.

There are concerns that if the executive order is implemented, it could be abused as a means of putting pressure on civil society groups or political opponents who are critical of the government under the pretext of countering terrorism.