Some of the largest law firms in the U.S. are telling clients to prepare for possible politically motivated governmental probes stemming from President Donald Trump’s new national security directive on domestic terrorism.
Several firms warned that though the Trump administration claims the directive is meant to curb political violence, the Department of Justice (DOJ) and other federal agencies may wield it against left-leaning nonprofit organizations who hold ideological beliefs and fund progressive political activity the president and his allies oppose.
“The stakes are high,” the global megafirm Arnold & Porter recently said in a memo to its clients.
“The Presidential Memorandum makes clear that DOJ intends to target tax-exempt organizations and their funders for investigation and potential criminal prosecution, including based on activities that have historically been viewed as protected by the First Amendment,” Arnold & Porter said.
Trump’s memo, formally named National Security Presidential Memorandum-7 (NSPM-7), directed law enforcement and regulatory agencies to “investigate and disrupt networks, entities, and organizations” that, according to the president, are responsible for encouraging acts of political violence.
Trump signed NSPM-7 after he, Vice President JD Vance and other senior White House officials vowed to destroy progressive nonprofits that they alleged, without evidence, fund and promote political violence and terrorism in the country.
Legal experts and free speech organizations have said that NSPM-7, and a separate Trump order purporting to designate the leaderless anti-fascist antifa movement as a “domestic terrorism organization,” could be used to silence dissent, as the two orders conflate protected speech with political violence and subscription to an idea with terrorism.
“The government doesn’t need NSPM-7 to investigate any of these groups if there’s reason to believe they’ve committed crimes that already exist,” Steve Vladeck, a Georgetown Law professor, wrote in an online post Thursday.
“Thus, the specter of labeling groups ‘domestic terrorist organizations’ is an exercise in legally empty but rhetorically dangerous symbolism—one that is trying to coerce more and more individuals and groups to ‘obey in advance,’” Vladeck added.
The broad definitions for political violence and domestic terrorism in NSPM-7 and Trump’s antifa order “signal that the administration is casting a wide net that could capture certain tax-exempt organizations and their funders, especially those on the ideological left who oppose the administration’s policies,” Patterson Belknap, a major New York-based firm, said in a notice to clients.
While it believes much of NSPM-7 will ultimately be challenged in courts, Patterson Belknap said the order in the meantime may spawn new Internal Revenue Service (IRS) audits. The reviews could result in organizations losing their tax exempt statuses — a fatal blow for most nonprofits.
Among its many provisions, NSPM-7 directed the IRS commissioner to ensure that no tax-exempt groups were “directly or indirectly” financing political violence or domestic terrorism.
Though federal law bars senior executive branch officials from directing the IRS to audit any taxpayer or nonprofit organization, the Trump administration could create pretext triggering an IRS audit through several different means.
Treasury Secretary Scott Bessent became the acting IRS commissioner in early August after Trump abruptly removed Billy Long, his former pick to lead the IRS.
Since returning to the White House, Trump has repeatedly threatened to revoke the tax-exempt status of various left-leaning nonprofit and educational institutions. Bessent in the past appeared supportive of Trump’s effort to strip Harvard’s tax-exempt status. As acting commissioner, Bessent has asserted increased control over the tax agency by firing senior executives.
WilmerHale, a legal heavyweight that’s been targeted by Trump, also sent a recent warning to clients. It noted that NSPM-7 could also open nonprofit employees and leaders up to criminal charges by directing the IRS chief to direct “such organizations, and the employees and officers of such organizations, to the Department of Justice for investigation and possible prosecution.”
“Foundations, individual funders, and other nonprofit organizations are a particular focus and this action is likely to prompt a series of actions, including reviews of tax-exempt status of organizations and, potentially, criminal investigations,” WilmerHale cautioned.
The Trump administration in recent weeks openly targeted three progressive organizations by name: the Open Society Foundations, a progressive grant network founded by Democratic megadonor George Soros; the Southern Poverty Law Center, which tracks right-wing extremism; and the Ford Foundation, another progressive philanthropic group.
Before Trump signed the memo, senior DOJ officials directed several U.S. attorneys offices across the country to open investigations into the Open Society Foundations, according to the New York Times.
Over 100 left-leaning nonprofits vowed in a letter to band together to push back against attacks on the philanthropic sector. The organizations said the Trump administration’s recent threats against nonprofits “undermine our democracy and harm all Americans.”
In response to NSPM-7, several nonprofits have made plans to join a “NATO-like” alliance to protect each other from the Trump administration, NBC News reported. The alliance would involve exchanging strategic, legal support and staff with targeted nonprofits.
Diane Yentel, the president and CEO of the National Council of Nonprofits — the largest network of nonprofits in North America — said in a statement that Trump’s memo was “a blatant attack on one of the core principles of our democracy, the freedom of speech.”
“This rhetoric and action undermines the lifesaving work of millions of nonprofit staff and volunteers and puts them at risk,” Yentel said.