Carolyn Schenck Comments in The Wall Street Journal on Potential Executive Order Targeting Nonprofits for Terrorism-Related Tax Suspensions

The Trump administration is considering an executive order that would list some nonprofit organizations as having terrorist ties, a move that would suspend their tax-exempt status immediately and could cripple their operations.

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“We’re seeing a new enforcement infrastructure being connected across agencies,” said Carolyn Schenck, a former IRS official who is now at law firm Caplin & Drysdale. “None of these tools is new. What is new and potentially very consequential is putting them together around the same organizations and the same conduct.”

If the administration uses section 501(p) to suspend a group’s tax-exempt status, the group would likely need to sue and allege that the designation was arbitrary and capricious in order to get a court to reverse the decision, Schenck said. That could be challenging because some of the government’s evidence could be considered classified. 

For the full article, please visit The Wall Street Journal’s website.