House Republicans Propose Expanded Tax Rules Targeting Nonprofits, University Endowments

House Republicans have introduced a tax package that includes a controversial provision allowing the Treasury Secretary, appointed by the President, to unilaterally revoke the tax-exempt status of nonprofits deemed to support terrorism, bypassing traditional adjudication processes. This move has sparked significant concern and opposition from Democrats, nonprofit leaders, and civil liberties groups who warn it could be used arbitrarily to target organizations based on political agendas rather than clear evidence, threatening nonprofits' ability to serve vulnerable communities. The provision echoes earlier legislation from the previous Congress and has been criticized for ignoring due process and potentially weaponizing federal power, with critics highlighting risks of targeting nonprofits that advocate for issues opposed by the Trump administration. Republicans defend the measure as necessary to prevent taxpayer subsidies to terrorism, but the lack of clear definitions and safeguards has fueled fears of abuse. Additionally, the broader tax package proposes changes affecting tax-exempt institutions such as colleges and universities, including modifications to the endowment tax and how students are counted toward tax thresholds. As the House Ways and Means Committee advances the bill, debates continue over the balance between national security interests and protecting nonprofit organizations from politicized enforcement.