A series of actions by the Trump Administration and certain state law enforcement officials have indicated that the nonprofit sector may face special scrutiny. These actions include the following:

  • On September 25, 2025, President Trump issued National Security Presidential Memorandum/NSPM-7, Countering Domestic Terrorism and Organized Political Violence. The memorandum directed the National Joint Terrorism Task Force and other federal agencies to investigate (1) those who commit political violence, domestic terrorism, and deprivation of rights; (2) the “institutional and individual funders, and officers and employees of organizations” that fund those actions; and (3) any nongovernmental organizations and U.S. citizens living overseas or with close foreign ties for potential violations of the Foreign Agents Registration Act (“FARA”) or money laundering laws relating to the same.
  • On September 3, 2025, President Trump issued a memorandum directing the Attorney General to investigate whether federal grant funds are being used illegally for lobbying.
  • On October 15, 2025, the Wall Street Journal reported that the Trump Administration is considering changes at the IRS that would make criminal enforcement of certain tax laws easier.
  • State Attorneys General have pursued nonprofits for alleged failures to follow charitable registration requirements.

In this alert, we list a number of proactive steps that organizations may consider taking in this period of heightened scrutiny and enforcement.

Tags: IRS, lobbying, nonprofits
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Photo of Robert Kelner Robert Kelner

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads…

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads the firm’s prominent congressional investigations practice.

Rob’s political law compliance practice covers federal and state campaign finance, lobbying disclosure, pay to play, and government ethics laws. His expertise includes the Federal Election Campaign Act, Lobbying Disclosure Act, Ethics in Government Act, Foreign Agents Registration Act, and Foreign Corrupt Practices Act.

He is also a leading authority on the arcane rules governing political contributions and marketing activities by registered investment advisers and municipal securities dealers.

Rob’s political law clients include numerous multinational corporations, many of which are household names.  He counsels major banks, hedge funds, private equity funds, trade associations, PACs, political party committees, candidates, lobbying firms, and politically active high-net-worth individuals. He has represented the Republican National Committee, National Republican Congressional Committee, and National Republican Senatorial Committee.  He also advises Presidential political appointees on the complex vetting and confirmation process.

As a partner in the firm’s White Collar Defense & Investigations practice group, Rob regularly defends clients in congressional investigations before virtually every major congressional investigation committee.  He also defends corporations and others in investigations by the Federal Election Commission, the Public Integrity Section of the U.S. Department of Justice, federal Offices of Inspector General, and the House & Senate Ethics Committees.  He has prepared many CEOs and corporate executives for testimony before congressional investigation panels. He regularly leads the Practicing Law Institute’s training program on congressional investigations for in-house lawyers.  In addition, he is frequently retained to lead internal investigations and compliance reviews for major corporate clients concerning lobbying and campaign finance law issues.

Rob has appeared as a commentator on political law matters on The PBS News Hour, CNBC, Fox News, and NPR, and he has been quoted in the New York Times, Washington Post, Wall Street Journal, Associated Press, Legal Times, Roll Call, The Hill, Politico, USA Today, Financial Times, and other publications.

Rob is Chairman of Covington’s Professional Responsibility Committee and a General Counsel of the firm.  He also currently serves as Chairman of the District of Columbia Bar’s Legislative Practice Committee, and he previously was appointed by the President of the American Bar Association to serve on the ABA’s Standing Committee on Election Law.

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Photo of Peter Koski Peter Koski

Drawing on his experience as a senior DOJ official and leading international anti-corruption practitioner, Peter Koski represents companies and individuals in sensitive, high-stakes government and regulatory enforcement matters and internal investigations.

Peter has a depth of experience investigating, bringing to trial, and handling…

Drawing on his experience as a senior DOJ official and leading international anti-corruption practitioner, Peter Koski represents companies and individuals in sensitive, high-stakes government and regulatory enforcement matters and internal investigations.

Peter has a depth of experience investigating, bringing to trial, and handling on appeal complex white collar matters involving the public and private sectors. He has handled an array of matters relating to foreign and domestic corruption, business and human rights, supply chain sourcing, cyber security, and violations of the federal laws governing elected and appointed officials. He has particular experience defending clients against alleged violations of the Trafficking Victims Protection Reauthorization Act (TVPRA), the Food, Drug, and Cosmetic Act (FDCA), and the Federal Election Campaign Act (FECA), as well as conspiracy, honest services fraud, bribery, gratuities, money laundering, obstruction of justice, and conflicts of interest.

Prior to joining the firm, Peter served as Deputy Chief of the U.S. Department of Justice’s Public Integrity Section, where he helped manage a team of over 30 attorneys responsible for investigating and prosecuting corruption across the country. In this capacity, he also argued complex constitutional issues before the federal courts of appeal. In over a decade of service in the Justice Department, Peter partnered with numerous U.S. Attorney’s Offices and worked closely with senior officials at over 25 federal agencies. Peter has tried over two dozen bench and jury trials, appeared in court in over a dozen districts across the country, and has handled corruption matters on five continents.

While in the U.S. Government and at Covington, Peter has worked closely with multilateral organizations, such as the Organisation for Economic Co-operation and Development (OECD). His previous experience with the OECD included serving as the U.S. representative on the Anti-Corruption Network Law Enforcement Advisory Board and the Advisory Group for the Anti-Corruption Network for Eastern Europe and Central Asia Thematic Review on Criminalization of Corruption.

Relying on this experience, Peter works with clients to develop effective due diligence programs related to sourcing and supply chains. He also analyzes the impact of regulator activity in this space, and develops strategies for engaging directly with regulators and NGOs. In this capacity, he helps companies assess the impact of Withhold Release Orders and counsels clients on the statutory regimes related to human rights and global supply chain issues.

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Photo of Brian D. Smith Brian D. Smith

Brian Smith assists clients with challenging public policy matters that combine legal and political risks and opportunities.

Brian represents companies and individuals facing high-profile and high-risk congressional investigations and hearings, and other criminal, civil, and internal investigations that present legal, political, and public…

Brian Smith assists clients with challenging public policy matters that combine legal and political risks and opportunities.

Brian represents companies and individuals facing high-profile and high-risk congressional investigations and hearings, and other criminal, civil, and internal investigations that present legal, political, and public relations risks. He assists companies and executives responding to formal and informal inquiries from Congress and executive branch agencies for documents, information, and testimony. He has extensive experience preparing CEOs and other senior executives to testify before challenging congressional oversight hearings.

Brian develops and executes government relations initiatives for clients seeking actions by Congress and the executive branch. He has led strategic efforts resulting in legislation enacted by Congress and official actions and public engagement at the most senior levels of the U.S. government. He has significant experience in legislative drafting and has prepared multiple bills enacted by Congress and legislation passed in nearly every state legislature.

Prior to joining Covington, Brian served in the White House as Assistant to the Special Counsel to President Clinton. He handled matters related to the White House’s response to investigations, including four independent counsel investigations, a Justice Department task force investigation, two major oversight investigations by the House of Representatives and the Senate, and several other congressional oversight investigations.

Brian is a Professorial Lecturer in Law at the George Washington University Law School.

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Photo of Susan Leahy Susan Leahy

Susan Leahy has advised tax-exempt, nonprofit organizations on tax and corporate governance matters for over 25 years. She assists organizations in obtaining and maintaining tax-exempt status and advises boards and senior executives on a range of governance policies and procedures.

In her work…

Susan Leahy has advised tax-exempt, nonprofit organizations on tax and corporate governance matters for over 25 years. She assists organizations in obtaining and maintaining tax-exempt status and advises boards and senior executives on a range of governance policies and procedures.

In her work with tax-exempt organizations that operate in the United States, as well as internationally, Susan regularly:

Counsels clients on the tax implications involving:

Self-dealing, inurement, and impermissible private benefit to individuals and for-profit companies;
Lobbying, and political activities;
Unrelated business income tax;
Excess benefit transactions and compensation of executives;
Joint ventures and relationships with for-profit organizations;
Mergers of tax-exempt organizations and the acquisition or donation of assets; and
Corporate sponsorship.

Advises nonprofit boards of directors, board committees, and management with respect to:

Corporate formation and good governance principles;
Preparation for board and committee meetings; and
Conflicts of interests.
Provides guidance on state corporate and tax compliance for nonprofit organizations.

“Susan has been my ‘Go-To’ attorney for adept legal strategy and guidance for over 20 years. Susan skillfully led our organization’s volunteer leadership through a needed transition with compassion and sensitivity. Her legal assistance remains invaluable!” a nonprofit organization client noted.

“I highly value Susan’s expertise, responsiveness, and pragmatism,” said another client. “Her insight and advice have proven invaluable time and time again and remain integral to our ability to operate quickly and nimbly.”

Susan is the past chair of the Exempt Organizations Committee of the District of Columbia Bar and a member of the American Bar Association. Susan received her J.D. from Catholic University of America, Columbus School of Law and a B.B.A. from St. Bonaventure University.

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Photo of Kaitlyn Demers Kaitlyn Demers

Kaitlyn Demers is an associate in the firm’s Washington, DC office. She has significant experience in broad-based crisis management, advising clients on legal and political matters presenting complex risks. She has served two administrations–most recently as Special Assistant to the President and Chief…

Kaitlyn Demers is an associate in the firm’s Washington, DC office. She has significant experience in broad-based crisis management, advising clients on legal and political matters presenting complex risks. She has served two administrations–most recently as Special Assistant to the President and Chief of Staff for the Office of Legislative Affairs.

Kaitlyn represents companies and individuals facing high-profile and high-risk congressional investigations and hearings, and other criminal, civil, and internal investigations that present legal, political, and public relations risks.

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Photo of Andrew Garrahan Andrew Garrahan

Andrew Garrahan represents and counsels clients at the intersection of law and politics. He guides them through both regulatory compliance issues and government investigations on matters including state and federal campaign finance, ethics, lobbying, and corruption, as well as in congressional investigations.

Andrew’s…

Andrew Garrahan represents and counsels clients at the intersection of law and politics. He guides them through both regulatory compliance issues and government investigations on matters including state and federal campaign finance, ethics, lobbying, and corruption, as well as in congressional investigations.

Andrew’s prior career in political fundraising gives him a unique perspective on the challenges faced by his clients, which include corporations, candidates, government officials, political and nonprofit organizations, and private individuals.

Andrew’s counseling and advisory practice includes:

guiding clients on structuring of and compliance for their state and federal lobbying and grassroots advocacy campaigns;
representing campaigns, Super PACs, corporations, trade associations, and individuals on the applicability of the Federal Election Campaign Act (FECA) and state campaign finance law;
counseling on Foreign Agents Registration Act (FARA) registration and disclosure, and its interaction with the Lobbying Disclosure Act (LDA);
helping companies comply with state and federal ethics laws, particularly on gifts and conflicts of interests, and domestic anticorruption; and
auditing corporate political law compliance practices.

Andrew’s investigations and defense work includes:

representing clients in Congressional investigations, including responding to letter requests and subpoenas;
preparing company officers and other individuals for testimony in Congressional investigative hearings;
defending clients in Department of Justice matters related to campaign finance, lobbying, ethics, and public corruption; and
representing clients before the FEC and state campaign finance, lobbying, and ethics regulators.

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Photo of William Sokolove William Sokolove

William Sokolove is an associate in the Congressional Investigations, Election and Political Law, and White Collar Defense and Investigations Practice Groups. He advises clients cooperating with and responding to high-profile investigations before Congress and the Department of Justice that entail significant legal and…

William Sokolove is an associate in the Congressional Investigations, Election and Political Law, and White Collar Defense and Investigations Practice Groups. He advises clients cooperating with and responding to high-profile investigations before Congress and the Department of Justice that entail significant legal and reputational risks. He is familiar with each phase of the investigatory process, including preparing for congressional hearings and responding to subpoenas and requests for documents.

William is an active member of the firm’s LGBTQ+ Resource Group and maintains a robust pro bono practice. He has significant experience litigating on behalf of tenants facing eviction.

William was a law clerk on the Senate Judiciary Committee and worked on successful congressional and state attorney general campaigns.

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