By Brian Schwartz, Joel Schectman and Richard Rubin
WASHINGTON—Trump administration officials are exploring ways of challenging the tax-exempt status of nonprofits, according to people familiar with the matter, in a move that some IRS staffers fear could damage the agency’s apolitical approach.
In hourslong meetings that continued over a recent weekend, Internal Revenue Service lawyers explored whether they could alter the rules governing how nonprofit groups can be denied tax-exempt status, the people said.
The meetings started taking place shortly after the Trump administration appointed a new top interim lawyer at the agency, Andrew De Mello, whom Trump had nominated for a different post in his first term. De Mello privately discussed the nonprofit rules with agency officials, including those at the tax-exempt division, according to people familiar with the matter.
Another senior IRS official, Gary Shapley, separately said in at least one meeting that he’s giving priority to investigating the tax-exempt status of a select group of nonprofit organizations, according to people familiar with his remarks. Shapley made the comments as deputy head of the criminal investigations unit. Shapley, who is also an adviser to Treasury Secretary Scott Bessent, didn’t name any specific groups, the people said.
Some current and former IRS officials fear that the deliberations appear to depart from longstanding practice at the IRS. They come as Trump has said his administration will strip Harvard University of its tax-exempt status and suggested the administration could target other organizations.
Trump officials outside the IRS have also had ongoing conversations about how to potentially target nonprofits’ tax-exempt status and endowments for months, an administration official said.
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