In a stunning development, the largest Muslim charity in the United States has filed a lawsuit in federal court against another Islamic charity headquartered in the United Kingdom. The suit, filed by Virginia-based Islamic Relief USA against its onetime parent organization, Islamic Relief Worldwide (IRW), lends credence to many of the concerns expressed by the Middle East Forum (MEF) about the organization over the past decade.
“The Middle East Forum was the first to expose the extremism and terror ties of the Islamic Relief franchise,” said Sam Westrop, director of MEF’s Islamist Watch. “Foreign governments, federal agencies, and congressional committees have all cited our work amid concerns about this flagship Islamist institution and its funding of proxies for Hamas and other violent extremists. Now, we discover that MEF’s research sparked the political concerns that sparked this lawsuit. We commend Islamic Relief USA for highlighting our concerns about the extremist and deceptive practices of its parent organization, Islamic Relief Worldwide.”
IRUSA is asking the court to stop IRW from fundraising in the U.S., force financial restitution, and formally unwind the relationship between the two entities. “IRUSA has suffered, and will continue to suffer, irreparable harm as a result of IRW’s actions, unless IRW is enjoined from engaging in such unlawful and deceptive acts and practices,” the suit states.
IRUSA’s Tax Exempt Status at Risk
IRUSA, a charity with assets worth more than $340 million, filed a complaint against IRW in United States District Court for the Southern District of New York on March 23, 2026. IRW, which generated almost $400 million in revenue in 2024, stands accused of jeopardizing IRUSA’s legal standing, donor relationships, and humanitarian mission by exposing the American charity to the potential loss of its tax-exempt status in the United States.
“IRUSA was told by U.S. governmental entities that its tax-exempt status would be threatened if it continued to maintain any operational or institutional relationships with IRW,” the complaint states. IRW, which previously has responded aggressively to journalistic queries from FWI, was terse in its most recent correspondence with the publication.
“We cannot comment in detail on ongoing legal proceedings but strongly reject the claims put to us here,” an IRW spokesperson told FWI. “Our focus remains on delivering humanitarian support to those in need worldwide.” FWI has contacted IRUSA for comment and will publish it when received.
We commend Islamic Relief USA for highlighting our concerns about the extremist and deceptive practices of its parent organization, Islamic Relief Worldwide.
The Accusations
In its complaint, IRUSA claims that IRW unlawfully solicited donations from U.S. residents without proper registration, in violation of state laws and contractual agreements that granted IRUSA exclusive rights to operate under the “Islamic Relief” name in the U.S. The complaint further alleges that IRW used digital advertising and a similar brand identity to divert donations, causing confusion among donors—some of whom reportedly gave money to IRW believing they were supporting IRUSA.
IRUSA claims that IRW blocked audits, refused to return millions of dollars in unspent funds, and declined to engage in dispute resolution processes as outlined in a now-canceled agreement governing the relations between the two charities. In one instance, IRUSA alleges that IRW undertook procurement activities involving goods sourced from Iran for a humanitarian project in Afghanistan, creating potential sanctions-related risks and violating contractual obligations to comply with U.S. law. These actions, IRUSA argues, demonstrated a pattern of non-cooperation and disregard for legal and regulatory requirements tied to joint projects.
This alleged conduct, IRUSA argues, not only violated the law but also undermined its fundraising capacity, including during critical periods such as Ramadan.
“IRW’s conduct has deliberately and maliciously jeopardized IRUSA’s reputation and mission through fraudulent and illegal conduct,” IRUSA declares in its complaint.
IRW Long Under Scrutiny
Islamic Relief Worldwide has faced sustained scrutiny over the past decade from governments, think tanks, and watchdog groups, which have raised concerns about alleged extremist links and governance practices. Reports from organizations including NGO Monitor, the Henry Jackson Society, and the Middle East Forum have compiled allegations ranging from ties to Muslim Brotherhood networks to the platforming of controversial clerics and associations with groups accused of supporting terrorism.
Government actions have reinforced these concerns. The U.S. State Department cut ties in 2021, citing antisemitism among IRW leadership. Earlier measures include Israel’s 2014 ban over alleged Hamas financing, the UAE’s designation of IRW and its U.K. arm as terrorist entities, and Bangladesh’s 2017 decision to bar the charity from Rohingya camps over fears of radicalization.
Conflict Started With Congressional Scrutiny of IRUSA
The lawsuit follows more than a year of escalating tensions between the two organizations driven by Congressional scrutiny. Problems began in September 2024, when the House Ways and Means Committee urged the Internal Revenue Service to examine whether IRUSA’s tax-exempt status should be revoked due to its relationship with IRW. In its letter to the IRS, which relied on investigative material produced by the Middle East Forum, the committee highlighted concerns about IRW’s cooperation with Hamas-affiliated entities and the history of antisemitic statements by its leadership.
Lawmakers noted that numerous countries banned IRW from operating within their territories because of alleged terror financing and ties to the Muslim Brotherhood. The letter also stated that major banks such as UBS and HSBC had reportedly closed IRW accounts over terrorism-financing concerns. “Given IRW’s activities and IRUSA’s decisions to continue funding IRW, the IRS should revoke IRUSA’s tax-exempt status,” the letter stated.
Subsequent to this letter, “IRUSA was told and understood that it was to send no more funds to IRW even for redirection to charitable programs, and that doing so would jeopardize its tax-exempt status,” the complaint declares. To make matters worse for IRUSA, it “received inquiries from individual state regulators and from its banking partners that seek information about IRUSA’s relationship with IRW,” the complaint states.
Pressure on IRUSA increased in late 2025 when the House Ways and Means Committee sent a second letter to the IRS, also reliant on MEF research, which again called on the IRS to rescind IRUSA’s tax-exempt status, declaring that IRW was “suspected of having terrorist ties to groups like Hamas, using those ties to actively support and funnel resources in support of terrorism.”
This prompted IRUSA to invoke its right under a previously signed “members agreement” with IRW to “suspend participation in all programs executed” by its U.K. affiliate. The complaint states that even after it severed ties with IRW, IRUSA “sought to engage in goodfaith [sic] negotiations to resolve the situation, without permanent and complete severance of any possible informal relationship between” the two groups. IRW responded by preventing IRUSA from auditing the transfer of sewing machines between Iran and Afghanistan.
Orphan Program Canceled IRUSA Asserts
The rupture between the two organizations led to the cancellation of the Orphan Sponsorship Program (OSP), which operated as a global humanitarian initiative funded by Islamic Relief USA (IRUSA) and administered by Islamic Relief Worldwide (IRW), the complaint alleges.
Established in 2022 under a five-year agreement running through 2026, the program provided financial support to improve the “health, nutrition, education, [and] mental and physical wellbeing” of orphans and their families. IRUSA raised funds from donors and transferred them to IRW, which managed implementation, recordkeeping, and distribution of aid across multiple countries, including Albania, Bangladesh, Bosnia, Ethiopia, Indonesia, Iraq, Malawi, Mali, and Pakistan. As of mid-2025, the program supported approximately 20,780 orphans worldwide.
In late 2025, IRUSA notified IRW that it intended to terminate IRW’s role as administrator and transfer the program to other vetted partners while maintaining uninterrupted support for beneficiaries. According to the complaint, IRUSA did not seek to end sponsorships but to restructure oversight due to mounting regulatory concerns.
Instead, IRW allegedly treated the notice as a full termination and, on or about January 15, 2026, canceled sponsorships for hundreds of orphans, IRUSA alleges. The complaint further alleges that IRW created false records attributing the cancellations to IRUSA and claiming that donors were no longer available. IRUSA says it demanded corrections and an accounting of funds, but IRW refused and subsequently cut off IRUSA’s access to program data, leaving it unable to determine whether additional beneficiaries lost support.
“IRW wrongfully used the email of an IRUSA employee to create the false impression that IRUSA was cancelling benefits to orphans, when in fact IRW took these actions while refusing to cooperate in the transfer of orphan support programming to other partners,” the suit alleges.
IRUSA’s lawsuit against IRW indicates that the U.S.-based charity has decided to distance itself from its own troubling history of affiliating with Islamist organizations in the Middle East. As documented in previous MEF reports, IRUSA leaders have worked with Hamas-linked organizations in the Gaza Strip and promoted antisemitic conspiracy theories on social media.
IRW Subject to Previous Controversy
IRUSA’s lawsuit poses a direct challenge to the credibility of Islamic Relief Worldwide, an organization that has aggressively pushed back against critical scrutiny. In response to prior FWI reporting, IRW has categorically dismissed allegations linking it to extremist activity as “completely untrue” and “defamatory.” For example, IRW successfully pressured two U.K. outlets—GB News the Daily Mail to apologize for their coverage of the organization.
MEF’s Westrop suggests that the lawsuit might be a watershed moment for IRUSA’s operations in America. “Should Islamic Relief USA secure a clean break from its Islamist parent, we hope that Islamic Relief USA leaders also reject Islamism more broadly, and embrace reformist Muslim allies. We’d be happy to help with this,” he said.
