House Republicans are calling for a major IRS crackdown on nonprofits after investigators uncovered a Minnesota fraud scheme tied to terrorist financing. The scandal involves misuse of Medicaid and pandemic-era aid programs. Lawmakers say existing safeguards failed to protect taxpayers.
House Republicans demand IRS action after a Minnesota nonprofit fraud scheme allegedly sent taxpayer money to terrorists. Billions may be involved, dozens convicted, and new laws proposed to tighten oversight and denaturalization rules. #IRS #NGOs #Fraud #Corruption pic.twitter.com/OAHzZ7Rd6l
— Matthew Brady (@mattbrady775) January 24, 2026
- Republicans on the House Ways and Means Committee urged the Internal Revenue Service to strengthen oversight of tax-exempt organizations.
- Lawmakers cited a massive Minnesota fraud scheme that allegedly funneled taxpayer funds to Al-Shabaab, a U.S.-designated terrorist organization.
- The scheme involved abuse of Medicaid and nonprofit programs during COVID-19, with nearly 80 DOJ prosecutions so far.
- IRS Acting Commissioner Scott Bessent and CEO Frank Bisignano received a formal letter citing “fraud, waste, and abuse.”
- Minnesota nonprofit Feeding Our Future misused over $250 million intended for low-income children.
- Investigations suggest up to $9 billion in fraud across 14 Minnesota Medicaid programs.
- Minnesota Gov. Tim Walz and Minneapolis Mayor Jacob Frey criticized federal probes as political overreach.
- Sen. Eric Schmitt introduced legislation to expand denaturalization for individuals involved in fraud or terrorism.
