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FIRST ON FOX: The California chapter of the Council on American-Islamic Relations (CAIR) is going through heightened scrutiny as Home Methods and Means Committee Chairman Jason Smith referred the group to the IRS for a probe into whether or not the nonprofit ought to lose its tax-exempt standing, citing alleged misuse of taxpayer funds, potential violations of federal regulation and assist for illegal exercise.
“Tax-exempt standing is a privilege, not a proper,” Smith, a Republican from Missouri, advised Fox Information Digital Tuesday. “Organizations that obtain particular therapy beneath the tax code should observe the regulation and function within the public curiosity, not bankroll criminal activity, mislead federal companies, or misuse hard-earned taxpayer {dollars}.”
Smith despatched a letter to Treasury Secretary and appearing IRS chief Scott Bessent and IRS CEO Frank Bisignano Tuesday referring CAIR-California for IRS evaluation, arguing that the nonprofit could now not meet the authorized requirements required to function as a 501(c)(3) group. The letter claims that proof alleges CAIR-California improperly used hundreds of thousands of {dollars} in federal funds, offered deceptive info to the IRS, and materially supported exercise that resulted in arrests and violations of the regulation, significantly throughout campus protests throughout California.
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Home Methods and Means Committee Chairman Jason Smith despatched a letter to Treasury Secretary and appearing IRS chief Scott Bessent, pictured right here, and IRS CEO Frank Bisignano referring CAIR-California for IRS evaluation. (Al Drago/Getty Photographs)
The Council on American-Islamic Relations is a number one American Muslim civil rights group, with chapters throughout the nation and its residence base positioned in Washington, D.C. Republicans have scrutinized CAIR lately, together with requires Treasury critiques over alleged Hamas ties — allegations the group denies.
CAIR pushed again on the letter to Fox Information Digital Tuesday, calling it “embarrassing” and primarily based on “a false declare made by a pro-Israel group with out fact-checking.”
The New York Put up revealed an article revealed in March 2025 primarily based on an advocacy group, Clever Advocacy Community, investigation into CAIR-California that discovered alleged monetary irregularities.
CAIR-California consists of workplaces in Los Angeles, the San Francisco Bay Space, Sacramento and San Diego.
The decision for an investigation comes because the IRS and different investigators dig into what officers say is a sprawling COVID-era scheme in Minnesota involving cash laundering that has dominated headlines since earlier than the vacation season. Federal prosecutors have estimated the fraud may exceed $1 billion and rise to as excessive as $9 billion.
Officers have made dozens of arrests, the vast majority of that are from the state’s Somali group.
“The widespread fraud uncovered in Minnesota has solely made our efforts to root out fraud within the nonprofit sector extra pressing, and we owe it to the American taxpayer to carry these dangerous actors accountable,” Smith advised Fox Digital. “If these allegations are true, CAIR-California doesn’t meet the requirements required to take care of tax-exempt standing, and the IRS should act accordingly.”
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The chairman’s letter detailed considerations surrounding CAIR-CA’s dealing with of greater than $7 million in federal refugee legal-aid funding meant to assist resettle Afghan refugees.
The referral, citing the New York Put up article detailing a watchdog group’s earlier investigation, indicated CAIR-CA assisted fewer than 10% of the refugees it pledged to assist, whereas allegedly routing hundreds of thousands of {dollars} by means of an unregistered affiliate working beneath CAIR-CA’s tax identification quantity — doubtlessly exposing the group to False Claims Act violations, in accordance with the referral.
Home Methods and Means Committee Chairman Jason Smith is urging the Inner Income Service to research whether or not a California-based chapter of the Council on American-Islamic Relations ought to lose its tax-exempt standing. (Leonard Ortiz/Digital First Media/Orange County Register by way of Getty Photographs)
“Not solely does this misdirection of funds again to itself doubtlessly violate the regulation, however the failure of CAIR-CA to correctly doc using grant funding would additionally place the group liable to violating the False Claims Act for misrepresenting grant use,” Smith wrote.
CAIR advised Fox Information Digital that Smith’s letter was “provably inaccurate letter,” and primarily based on “retracted story about CAIR-California that The New York Put up needed to right after it repeated a false declare made by a pro-Israel group” is “an indication of how determined he and different Israel First members of Congress have develop into to smear and silence Individuals who converse up for Palestinian human rights and in opposition to the waste of American taxpayer {dollars} on Israel’s genocide in Gaza.”
CAIR shot continued that, “Opposite to the false claims made by Mr. Smith, CAIR-California is a revered civil rights group with a protracted report of lawful advocacy and cooperation with authorities companies.”
“Each greenback CAIR-California receives is used strictly for its meant objective and topic to rigorous inside and exterior oversight, auditing, and reporting. Funds designated to assist Afghan refugees are used solely to serve that inhabitants, according to grant phrases. CAIR-California additionally receives a various set of funds that permits the group to serve purchasers past the Afghan and Muslim group,” CAIR continued in an emailed remark.
If the IRS revokes a bunch’s 501(c)(3) standing, it could possibly set off a cascading hit on the group — donations could now not be tax-deductible, federal taxes and penalties can apply, and the nonprofit’s funding pipeline can dry up as donors and grantmakers pull again.
The letter provides that proof suggests CAIR-California “institutionally endorsed and materially supported” school encampments through the anti-Israel protests that swept the nation from 2021 till the Trump administration, together with protests that “resulted in violations of the regulation and/or arrests.”
The letter argued that CAIR nationwide additionally promoted and endorsed a “Protest Donald Trump” rally on the Minnesota Republican Celebration Lincoln-Reagan Dinner through the 2024 election cycle, which the letter claims could have violated the prohibition on 501(c)(3)s to straight or not directly take part, or intervene in, any political marketing campaign.
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Smith argued that whereas protests are usually permitted, the IRS has beforehand discovered teams can lose exempt standing if demonstrations cross into civil disobedience or different criminal activity.
“The one allegation in Mr. Smith’s letter that’s even remotely near correct is the declare that CAIR expressed assist for faculty college students who hosted sit-ins to peacefully protest their college’s monetary entanglements with the Israeli authorities’s genocide in Gaza,” CAIR stated. “We had been proud to precise solidarity with college students peacefully protesting the Gaza genocide, who had been on the suitable aspect of historical past, identical to the faculty youngsters who protested segregation, the Vietnam Conflict, and apartheid South Africa.”
CAIR despatched its personal letter to Bessent and the IRS Tuesday morning following Smith’s letter, Fox Information Digital discovered.
Homeland Safety investigators had been half of a giant fraud investigation on Monday on Minneapolis following the discharge of a video over the weekend on alleged day care fraud. (Division of Homeland Safety)
Conservatives have beforehand argued CAIR’s nationwide community crosses from civil-rights advocacy into partisan politics and activism — pointing to previous allegations cited by GOP lawmakers of improper political involvement and longstanding considerations about ties to Hamas-linked entities, which CAIR has repeatedly denied.
Texas Gov. Greg Abbott, for instance, designated CAIR, in addition to the Muslim Brotherhood, as international terrorist organizations beneath state regulation in 2025, claiming the teams “assist terrorism throughout the globe and subvert our legal guidelines by means of violence, intimidation, and harassment are unacceptable.”
CAIR pushed again on Abbott’s designation, telling the Houston Chronicle in January that it has labored to cease terrorism within the U.S., together with claiming it flagged the FBI to a possible menace in opposition to President Donald Trump beneath his first time period, the outlet reported.
“We solely reveal it now in response to those ludicrous claims that CAIR — which has fairly actually helped to cease acts of terrorism — is a terrorist group,” Edward Ahmed Mitchell, CAIR’s nationwide deputy director, advised the Chronicle. “CAIR has not solely condemned terrorism verbally, however we have now taken motion to cease terrorism.”
Smith’s referral cited longstanding considerations about CAIR’s alleged connections to terrorism, together with reported hyperlinks to the now-defunct Holy Land Basis, which was convicted in 2009 for offering materials assist to Hamas.
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“Given CAIR-CA’s alarming exercise, together with the truth that CAIR’s community holds suspicious ties to terrorist organizations like Hamas, I ask that you just use your authority to research CAIR-CA and think about the revocation of tax-exempt standing of CAIR-CA upon satisfactory evaluation,” Smith concluded in his letter.
