Nervous Nonprofits Brace for Trump-Driven Criminal Tax Scrutiny

Nonprofit and Tax-Exempt Organizations attorney Andrew Grumet was quoted in a Bloomberg Tax article about increased federal scrutiny of nonprofit organizations. President Donald Trump signed an executive order directing the IRS to refer organizations that could be funding terrorism or political violence to the U.S. Department of Justice (DOJ) for investigation as well as called for some universities to lose tax-exempt status because of their diversity, equity and inclusion (DEI) practices. Mr. Grumet observed that these developments have prompted clients to review internal policies, mission statements and marketing collateral to avoid attracting unwanted attention. For example, an organization could be targeted because it helps fund an initiative or group whose goals run contrary to White House priorities.

"Now you have grant-making organizations really thinking, 'Wait a minute, who do we make grants to? Is that potentially a source where we need to be concerned?'" he said, adding that clients are also starting to reach out to their representatives in Congress as a means of playing defense.

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