Nonprofit Oversight and IRS Enforcement

House Ways and Means Committee Chairman Jason Smith, R‑Mo., has sent a formal referral to Treasury Secretary and acting IRS chief Scott Bessent and IRS CEO Frank Bisignano urging an IRS probe into whether CAIR‑California should lose its 501(c)(3) tax‑exempt status. Citing a New York Post report based on a watchdog group’s investigation, Smith alleges the chapter improperly used millions in federal money, including more than $7 million in refugee legal‑aid funds for Afghan resettlement, served fewer than 10% of the refugees it pledged to help, misled federal agencies and the IRS, and "materially supported" protest activity that led to arrests. Smith ties the move to the broader Minnesota social‑services fraud scandal, arguing the case shows the need for a tougher crackdown on nonprofit abuse and warning that "tax‑exempt status is a privilege, not a right." CAIR responded to Fox News by calling the referral "embarrassing" and based on an "unfact‑checked" claim from a pro‑Israel group, and it continues to deny GOP accusations of Hamas ties. Any IRS action could test how aggressively the Trump administration uses tax enforcement against advocacy groups and deepen partisan fights over Muslim civil‑rights organizations, campus protests and the policing of terrorism‑related allegations.