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The Treasury Department is tightening the Internal Revenue Service’s (IRS) tax reporting requirements in an effort to expose nonprofit funding used for “excessive activity” and “fraud concealment.”
The move comes days after the Southern Poverty Law Center (SPLC), a non-profit organization known for social justice and racial justice, was indicted by a federal judge for allegedly funneling millions to members of extremist groups such as the Ku Klux Klan, Aryan Nations and the National Socialist Party of America (American Nazi Party).
“Public money and the state of not paying taxes requires public accountability,” Treasury Secretary Scott Besent wrote in a statement. “We are ending the days of hiding fraud, abuse and excessive activity behind complex nonprofit systems.
“If bad actors are abusing social welfare agencies, directors and officers must understand that transparency can lead to scrutiny, accountability and legal liability.”
Scott Besent, secretary of the Treasury Department, testifies before the House Financial Services Committee in Washington, DC, on Feb. 4, 2026. (Graeme Sloan/Bloomberg/Getty Images)
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The lawsuit against the SPLC was announced Tuesday, when Acting Attorney General Todd Blanche said the nonprofit “was doing the opposite of what it told its donors it was doing — not to end extremism but to support it,” at a subsequent news conference.
According to SPLC’s Form 990 filing with the IRS, the tax-exempt 501(c)(3) charity posted about $129 million in net income in fiscal year 2024 with assets of nearly $800 million.
The organization has disputed the federal charges, saying money given to cheap groups was used to “gather credible intelligence” through paid informants working within groups like the KKK.
The Southern Poverty Law Center (SPLC) building seen in March 2020 in Montgomery, Alabama. (Barry Lewis/Photos via Getty Images)
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“The federal government is armed with weapons to destroy the rights of our nation’s most vulnerable people,” SPLC interim president and CEO Bryan Fair said in a video statement. “And any organization like ours that tries to stop breaking the law.”
“While we no longer work with paid informants, we continue to take their safety seriously,” added Fair. “These people are risking their lives to infiltrate and inform about the activities of our nation’s brutal and violent gangs.”
Fox News Digital has reached out to the SPLC for comment.
Acting Attorney General Todd Blanche speaks during a press conference with FBI Director Kash Patel at the Department of Justice on April 21, 2026, in Washington, DC, following the indictment of the Southern Poverty Law Center on charges related to money laundering. (Nathan Posner/Anadolu via Getty Images)
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The Treasury Department plans to curb the lack of transparency surrounding 501(c)(3) by revising Form 990 to clarify grant programs that do not clearly show who is running the project and how the funds are spent.
The Ministry of Finance noted that increased reporting would make it more difficult for organizations to hide behind unclear arrangements.
“The status of the tax exemption is not beyond our control,” Assistant Treasury Secretary and IRS Chief Counsel Ken Kies wrote in a statement. “If an organization receives public funds or tax-deductible donations, it must be prepared to show who controls the money and where it goes.”
Under the current Form 990 rules, nonprofits generally do not have to disclose the names of individual donors and can provide vague descriptions of the entities to which payments are directed.
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Corrupt players, such as Shanghai-based American tech mogul Neville Roy Singham, are able to use non-profit organizations to hide the flow of money.
In the case of Singham, a known member of the Chinese Communist Party, a Fox News Digital investigation found millions of dollars flowing from him directly to organized groups across the country.
With limited reporting requirements, the trail of Singham’s money was difficult to follow because nonprofits are not mandated to disclose the names of individual donors.
In the SPLC case, federal authorities say the payments were made to fake companies, such as “Fox Photography” or “Rare Books Warehouse.”
However, those payments to fictitious entities are not required to be disclosed under the current Form 990 rules as individual recipients are not required to be reported.
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Treasury Secretary Scott Bessent arrives at the Mount Airy Casino Resort in Mount Pocono, Pennsylvania, on Dec. 9, 2025, for an inflation event with President Donald Trump. (Adam Gray/Bloomberg)
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Gaps in reporting are one of the key ways “dark money” nonprofits hide their money, which the Trump administration says is the main reason for plans to revise Form 990 requirements.
“This is an important case brought by the President [Donald] The Trump administration, and we thank the president for his leadership and funding of not only the FBI and the DOJ, but his commitment to get out there and put an end to fraud, conspiracy, and waste and abuse wherever it occurs, including at the Southern Poverty Law Center,” FBI Director Kash Patel said Tuesday.
