Trump’s "big, beautiful bill" buries a threat to free speech on page 380

The Republican reconciliation legislation — which President Trump refers to as his "big, beautiful bill" — is winding its way through Congress. Trump is right about one thing: it's big. The tax and spending legislation, which is exempt from the filibuster and can therefore be passed without any Democratic votes, is 389 pages.

Tucked away on page 380 is a provision that would give the Trump administration a powerful new tool to silence dissent.

The provision would grant the Treasury Secretary the power to terminate the tax-exempt status of any nonprofit group they deem a "terrorist supporting organization." A "terrorist supporting organization" is any nonprofit that provides "material support" to a designated terrorist group. The term "material support" is broadly defined, and includes "any service," "expert advice," or "personnel" — regardless of whether that support is connected to violent acts. Nor is there any standard of evidence regarding what kind of information the Treasury Secretary can consider when deciding whether a nonprofit provided "material support."

The Treasury Secretary only needs to notify the nonprofit of the impending designation. They can decline to describe the "material support" the nonprofit allegedly provided if the Treasury Secretary decides "disclosure of such description would be inconsistent with national security or law enforcement interests."

The nonprofit would have 90 days to respond to the Treasury Secretary or challenge the designation in court. But it shifts the burden of proof onto the nonprofit to establish its innocence.

A similar provision passed the House as a standalone bill in November 2024 on a 219-184 vote. 15 Democrats and all but one Republican supported the bill, largely based on allegations that nonprofit groups were supporting Hamas after the October 7 attacks on Israel.

But the nonprofit world believed the legislation was overly broad and ripe for abuse. David L. Thompson, acting CEO of the National Council of Nonprofits, warned that the legislation "could be used to target nonprofits that provide humanitarian support in areas where it is difficult to determine who is or isn’t a terrorist."

In a statement opposing the legislation, the National Council of Nonprofits, the Council on Foundations, and United Philanthropy Forum noted that, even if a nonprofit avoided a permanent designation, "designees would risk irreparable damage to their operations and reputation."

It is not hard to imagine this new power being abused by Trump. In his first term, for example, Trump called "Antifa," a loose coalition of anti-fascists, a terrorist group, and conflated them with the Black Lives Matter movement. Under this proposed new authority, the Treasury Secretary could then theoretically designate any nonprofit that assists with a Black Lives Matter protest as a "terrorist supporting organization." Or Trump could claim that a private university that failed to crack down on protests of Israel's military campaign in Palestine was providing "material support" to Hamas and, therefore, could be summarily stripped of its nonprofit status.

Earlier this year, Trump said publicly that he was exploring ways to strip the nonprofit status of "environmental groups and specifically the ethics watchdog organization Citizens for Responsibility and Ethics in Washington, or CREW."

There are, of course, instances where nonprofits have provided meaningful support to terrorist groups. But there are existing legal mechanisms to revoke a nonprofit's tax-exempt status in those cases.

Supporting terrorism is already illegal

It is illegal for anyone in the U.S. — including nonprofit organizations — to provide material support to terrorist organizations under the Antiterrorism and Effective Death Penalty Act of 1996. And the IRS can revoke the tax-exempt status of a nonprofit which engages in illegal activity.

But the IRS cannot simply claim that a nonprofit has done something to violate the law and immediately revoke their tax-exempt status without notice. Instead, any question about tax-exempt eligibility must be addressed through an IRS audit. IRS auditors will investigate the forms submitted by the nonprofit and can examine their correspondence or send auditors to investigate the nonprofit in person.

If the IRS finds evidence that a nonprofit is in violation of the terms of its tax-exempt status, the IRS can allow it to keep its status while mandating operational changes or propose revocation. If the IRS revokes a nonprofit’s tax-exempt status, the nonprofit has 90 days to seek a declaratory judgement from a court about its tax-exempt status. If the court also finds that its tax-exempt status should be revoked, the nonprofit can appeal that decision in a higher court.

This process is lengthy, but it allows nonprofits a chance to defend themselves and requires that the IRS presents strong evidence for revoking tax exempt status — a process that is eliminated by the reconciliation bill.

The bipartisan opposition

Turning tax-exempt status into a political weapon for the executive branch has drawn opposition from a variety of directions.

In November 2024, when the standalone bill was up for a vote, the ACLU said that it would create “a high risk of politicized and discriminatory enforcement” and that “the executive branch could use this authority to target its political opponents and use the fear of crippling legal fees, the stigma of the designation, and donors fleeing controversy to stifle dissent and chill speech and advocacy.”

Reason, a libertarian media outlet, published a piece last year saying the provision would grant the executive branch "unlimited power to destroy nonprofits." The outlet warned that it would allow the Treasury Department to target nonprofits based on "murky innuendo" and could easily be misused by future Democratic presidents to target right-wing groups.

When the November vote took place, Thomas Massie, a Tea Party conservative representative from Kentucky, broke with his party to vote against it. Jamie Raskin (D-MD), a former constitutional law professor, called the bill a “werewolf in sheep's clothing” and said it would "capsize" the right to due process.