A new domestic terrorism directive from the Trump administration is raising alarms among legal experts and nonprofit organizations. Critics fear the order could be used to weaponize the IRS and strip tax-exempt status from groups for political reasons.
October 5, 2025
Source:
MarketWatch
New Directive Raises First Amendment Alarms
A new Trump administration directive on domestic terrorism is sparking fears that the White House could weaponize the Internal Revenue Service to target left-leaning nonprofit organizations. Legal experts are warning that the order may unconstitutionally penalize groups for political speech.
Understanding NSPM-7
The directive, known as National Security Presidential Memorandum 7 (NSPM-7), instructs federal agencies, including the IRS, to investigate organizations the administration believes are encouraging political violence.
Critics, however, say its definition of "political violence" is dangerously broad. They argue it could easily be used to conflate legally protected speech and protest activities with genuine criminal acts, creating a chilling effect on free expression.
This approach has prompted widespread concern from civil liberties advocates about a politically motivated crackdown on dissent.
Keep up with the story. Subscribe to the PR+ free daily newsletter
Source:
The Wall Street Journal
IRS Independence and Legal Backlash
The directive explicitly threatens nonprofits with the loss of their tax-exempt status and could even lead to criminal prosecution. This has put a spotlight on the independence of the IRS and the administration's influence over the agency.
Fears of a Politicized Agency
While federal law prohibits direct orders from the White House to the IRS concerning specific audits, the administration can still trigger investigations through indirect means.
Concerns have been amplified by the recent appointment of acting IRS commissioner Scott Bessent, who is reportedly supportive of the president's political agenda. Bessent has already taken steps to tighten his control by dismissing senior executives within the agency.
Law Firms Issue Urgent Warnings
In response, several major law firms—including Arnold & Porter, Patterson Belknap, and WilmerHale—have issued alerts to their nonprofit clients.
The firms advise organizations to:
Prepare for increased scrutiny and potential audits.
Thoroughly document all activities to prove compliance with federal law.
Be ready for immediate legal action if targeted.
Legal experts widely anticipate that significant portions of NSPM-7 will be challenged in federal court.
Read More
Source:
MarketWatch
Share this news:
