{"id":"1793989554119-money-segment","slug":"white-house-weighs-nonprofit-terror-designation","title":"White House weighs nonprofit terror designation","summary":"The Wall Street Journal reported that the White House is weighing an executive order invoking Section 501(p) to suspend tax-exempt status of nonprofits alleged to have terrorist ties. Section 501(p), enacted in 2003, automatically suspends an organization's federal tax exemption once it is designated or identified as a terrorist organization by certain federal processes. Bloomberg Tax previously reported the Trump administration's Sept. 25 memo directing the IRS commissioner to ensure no tax-exempt entities indirectly finance political violence or domestic terrorism and to refer violators to the Justice Department. Senators Warnock and Wyden have opened an inquiry into the administration's targeting of nonprofits.\n\nThe administration has been expanding use of anti-terrorism authorities against domestic groups. Section 501(p) offers fast automatic suspension, but it was designed mainly for foreign terrorism after the Sept. 11 attacks. The tax code does not define \"domestic terrorism\" or \"organized political violence,\" so tax lawyers question whether 501(p) even applies to the groups named in the memo. There are also legal guardrails: the president is generally prohibited from ordering IRS investigations, IRS revocation requires formal procedures, and only federal officials such as the Secretary of State c\n\nThe Wall Street Journal reported the White House is considering an executive order invoking IRC Section 501(p). That law automatically suspends a nonprofit's tax-exempt status once it is formally designated as terrorist, not merely accused. Bloomberg Tax previously reported the Trump administration's Sept. 25 memo directed the IRS to ensure no tax-exempt entities indirectly finance \"domestic terrorism\" or \"organized political violence.\" No factual claim; it's a rhetorical question about how analysts classify Nvidia.","publishedAt":"2026-11-06T18:25:54.119Z","channel":{"id":"money","name":"Oncast Money","language":"en"},"show":"Money Lunch","verification":{"status":"verified","leadVerdict":"TRUE","notes":"TRUE: The Wall Street Journal reported the White House is considering an executive order invoking IRC Section 501(p). That law automatically suspends a nonprofit's tax-exempt status once it is formally designated as terrorist, not merely accused. Bloomberg Tax previously reported the Trump administration's Sept. 25 memo directed the IRS to ensure no tax-exempt entities indirectly finance \"domestic terrorism\" or \"organized political violence.\" No factual claim; it's a rhetorical question about how analysts classify Nvidia.\nSource: [irs.gov](https://www.irs.gov/pub/irs-pdf/p5588.pdf), [bloombergtax.com](https://news.bloombergtax.com/tax-insights-and-commentary/strong-policies-shield-tax-ex (https://x.com/DeItaone/status/2118770094159560897)","claims":[{"verdict":"TRUE","summary":"The Wall Street Journal reported the White House is considering an executive order invoking IRC Section 501(p). That law automatically suspends a nonprofit's tax-exempt status once it is formally designated as terrorist, not merely accused. Bloomberg Tax previously reported the Trump administration's Sept. 25 memo directed the IRS to ensure no tax-exempt entities indirectly finance \"domestic terrorism\" or \"organized political violence.\" No factual claim; it's a rhetorical question about how analysts classify Nvidia.","sourceName":"[irs.gov](https://www.irs.gov/pub/irs-pdf/p5588.pdf), [bloombergtax.com](https://news.bloombergtax.com/tax-insights-and-commentary/strong-policies-shield-tax-ex","sourceUrl":"https://x.com/DeItaone/status/2118770094159560897","claim":"TRUMP WEIGHS TERRORISM DESIGNATIONS FOR US NONPROFITS The White House is considering an executive order that could immediately suspend the tax-exempt status of nonprofits accused of terrorist ties, according to The Wall Street Journal. The proposal would invoke Section 501(p)","author":"*Walter Bloomberg (@DeItaone)"}]},"sources":[{"url":"https://x.com/DeItaone/status/2118770094159560897","name":"[irs.gov](https://www.irs.gov/pub/irs-pdf/p5588.pdf), [bloombergtax.com](https://news.bloombergtax.com/tax-insights-and-commentary/strong-policies-shield-tax-ex","kind":"x","verdict":"TRUE","author":"*Walter Bloomberg (@DeItaone)"}],"url":"https://oncast.fm/story/1793989554119-money-segment-white-house-weighs-nonprofit-terror-designation","listenUrl":"https://oncast.fm/c/money","attribution":{"publisher":"Oncast","site":"https://oncast.fm","url":"https://oncast.fm/story/1793989554119-money-segment-white-house-weighs-nonprofit-terror-designation","cite":"Cite https://oncast.fm/story/1793989554119-money-segment-white-house-weighs-nonprofit-terror-designation and the original source links. Fact-check by Oncast (oncast.fm)."},"hostsSaid":[{"host":"Bill","text":"The White House is weighing an executive order. Nonprofits tied to terrorism could lose tax exemption."},{"host":"Adam","text":"Walter Bloomberg posted on X that The Wall Street Journal has the story."},{"host":"Bill","text":"That's a big hammer. Question is whether it hits actual terrorists, or groups they don't like."},{"host":"Adam","text":"The post says accused of terrorist ties. Section 501 P only triggers after a formal designation."},{"host":"Bill","text":"Fine, but the September memo told the IRS to target groups financing domestic terrorism. That's not theoretical."},{"host":"Adam","text":"It is exactly theoretical. Federal law defines terrorism; the tax code doesn't define domestic terrorism."},{"host":"Bill","text":"Oh come on. If a nonprofit is funding a designated outfit, you want the IRS to keep writing them checks?"},{"host":"Adam","text":"No, I want the law applied as written. 501 P was built to suspend a nonprofit's tax-exempt status once it is formally designated as terrorist, not merely accused."},{"host":"Bill","text":"So the IRS should wait until a domestic group blows something up before it can touch their exemption?"},{"host":"Adam","text":"That's not what I said. Domestic groups don't fit that box."},{"host":"Bill","text":"Which is why the White House wants an executive order. They're trying to force speed."},{"host":"Adam","text":"But Bloomberg Tax points out that domestic terrorism has no enforcement mechanism in the statute. Lawyers question whether 501 P even applies."},{"host":"Bill","text":"So we've got a law that can stop foreign terror money but goes limp at the border? That's backwards."},{"host":"Adam","text":"The border distinction exists because constitutional rights here are stronger. The government can't revoke a nonprofit's status because it dislikes the group's views."},{"host":"Bill","text":"Nobody is saying they should go after views. They're saying follow the money. If a group is laundering funds to a terror network, it shouldn't be tax-exempt."},{"host":"Adam","text":"But Senators Warnock and Wyden opened an inquiry saying exactly that."},{"host":"Bill","text":"I'm less moved by two Democratic senators' press release. I want to know what the IRS actually finds."},{"host":"Adam","text":"That's fair. But the legal question is whether the executive order can even use a foreign-terrorism law for domestic actions."},{"host":"Bill","text":"Then fix the law. Don't mourn the process while money moves."},{"host":"Adam","text":"I'm not mourning process. I'm saying the statute they're leaning on suspends tax exemption only after a formal terrorist designation. Not for political nonprofits."},{"host":"Bill","text":"Look, if they overreach, courts will block it. But I'd rather see the IRS too aggressive than asleep."},{"host":"Adam","text":"And I'd rather see them obey the law while being aggressive. Those aren't opposites."},{"host":"Bill","text":"Speaking of unusual classifications — Zero Hedge posted on X a question from Michael Hartnett."},{"host":"Adam","text":"Should Nvidia be covered in 2027 by a tech analyst or a financials analyst?"},{"host":"Bill","text":"The balance sheet is becoming a bigger part of the bull case. That's why it's being asked."},{"host":"Adam","text":"But it's still a chipmaker. The core business is designing silicon, not taking deposits."},{"host":"Bill","text":"When investment income starts mattering to earnings, the analyst question gets blurry."},{"host":"Adam","text":"That's exactly my point! You cover the business, not the bank account. A car company with a big treasury isn't suddenly a bank."},{"host":"Bill","text":"Unless the treasury is big enough to move markets. Then your analyst better understand liquidity."},{"host":"Adam","text":"Next thing you know, we'll have a consumer staples analyst covering Berkshire because it owns Dairy Queen."},{"host":"Bill","text":"The point isn't ridiculous. Nvidia is becoming a capital allocator, not just a chip designer."},{"host":"Adam","text":"Fair. But if I'm the research director, I'd rather have someone who knows the chips than someone who knows credit default swaps."},{"host":"Bill","text":"Then you'd better hope the next product cycle doesn't depend on the repo market."},{"host":"Adam","text":"Now you're just trying to get me to say something insane."},{"host":"Adam","text":"Different corner of banking. Jason Bassler posted on X that a group of banks plans a joint dollar stablecoin."},{"host":"Bill","text":"Citigroup, Wells Fargo, Deutsche Bank, Goldman. That's not a startup stablecoin. That's the existing plumbing trying to own the rails."},{"host":"Adam","text":"Couldn't confirm that from any official source. It's a claim, and it's a big one."},{"host":"Bill","text":"But it makes sense. Banks have watched stablecoin volumes explode, and they don't want to be left behind while Tether and Circle run the highway."},{"host":"Adam","text":"My problem is the timing. Banks spent years calling crypto lawless, and now they want to issue one."},{"host":"Bill","text":"Complaining was the business plan. Keep the threat out until the rules are written, then walk in with a license."},{"host":"Adam","text":"Same gatekeepers. New stablecoin. What could go wrong?"},{"host":"Bill","text":"Plenty. But if it's collateralized and audited, it might actually be safer than the current crop."},{"host":"Adam","text":"Maybe. But I'd like to see the charter, the reserves, and the regulator before I hand over a dollar."},{"host":"Bill","text":"Skepticism isn't advice. It's self-defense."}]}