NEWNow you can hearken to Fox Information articles!
FIRST ON FOX: The California chapter of the Council on American-Islamic Relations (CAIR) is dealing with 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, instructed Fox Information Digital Tuesday. “Organizations that obtain particular therapy underneath the tax code should observe the regulation and function within the public curiosity, not bankroll criminal activity, mislead federal businesses, 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 overview, 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 thousands and thousands of {dollars} in federal funds, supplied deceptive data to the IRS, and materially supported exercise that resulted in arrests and violations of the regulation, significantly throughout campus protests throughout California.
BESSENT BLAMES WALZ AS TREASURY PROBES WHETHER MINNESOTA FRAUD FUNDS REACHED TERROR GROUP AL-SHABAB
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 overview. (Al Drago/Getty Photos)
The Council on American-Islamic Relations is a number one American Muslim civil rights group, with chapters throughout the nation and its dwelling base positioned in Washington, D.C. Republicans have scrutinized CAIR lately, together with requires Treasury evaluations 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 Publish 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 places of work 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 might 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 neighborhood.
“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 instructed 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.”
FEDERAL PROSECUTOR CALLS NEWSOM ‘KING OF FRAUD’ AS TRUMP LAUNCHES CALIFORNIA CORRUPTION PROBE
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 Publish 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 thousands and thousands of {dollars} by an unregistered affiliate working underneath CAIR-CA’s tax identification quantity — probably exposing the group to False Claims Act violations, in accordance with the referral.
Home Methods and Means Committee Chairman Jason Smith is urging the Inside 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 through Getty Photos)
“Not solely does this misdirection of funds again to itself probably violate the regulation, however the failure of CAIR-CA to correctly doc using grant funding would additionally place the group vulnerable to violating the False Claims Act for misrepresenting grant use,” Smith wrote.
CAIR instructed Fox Information Digital that Smith’s letter was “provably inaccurate letter,” and primarily based on “retracted story about CAIR-California that The New York Publish needed to appropriate 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 turn out to be to smear and silence People who communicate 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 an extended file of lawful advocacy and cooperation with authorities businesses.”
“Each greenback CAIR-California receives is used strictly for its meant function 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 enables the group to serve shoppers past the Afghan and Muslim neighborhood,” CAIR continued in an emailed remark.
If the IRS revokes a bunch’s 501(c)(3) standing, it could actually 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 throughout 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 throughout 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.
TRUMP DEMANDS CALIFORNIA HAND OVER RECIPIENT LISTS AS $10B PAUSED AMID FRAUD CONCERNS
Smith argued that whereas protests are typically 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 school college students who hosted sit-ins to peacefully protest their college’s monetary entanglements with the Israeli authorities’s genocide in Gaza,” CAIR mentioned. “We have been proud to precise solidarity with college students peacefully protesting the Gaza genocide, who have been on the precise facet of historical past, identical to the school children 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 have 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 overseas terrorist organizations underneath state regulation in 2025, claiming the teams “assist terrorism throughout the globe and subvert our legal guidelines by 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 underneath 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, instructed the Chronicle. “CAIR has not solely condemned terrorism verbally, however now we have 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.
CLICK HERE TO DOWNLOAD THE FOX NEWS APP
“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 simply use your authority to research CAIR-CA and think about the revocation of tax-exempt standing of CAIR-CA upon sufficient overview,” Smith concluded in his letter.
