The Wall Street Journal reported this development on Friday, citing US officials.
The WSJ also reported that US officials claim "national security advisor John Bolton and Secretary of State Mike Pompeo have been strong proponents of the move, which is meant to help the USA crackdown on businesses in Europe and elsewhere controlled by the IRGC".
Writing on Twitter, Heshmatollah Falahatpisheh, head of the Iranian Parliament's Committee on National Security and Foreign Policy, said Tehran would add the U.S. army to "the terrorist blacklist alongside Daesh" if the USA blacklisted the IRGC.
The administration's decision to make the designation was first reported by the Wall Street Journal.
In February, The Daily Wire reported that the IRGC claimed it successfully took control of seven to eight US drones flying over Syria and Iraq and monitored the intel the drones were collecting and broadcasting back to USA forces.
Meanwhile, previous year Director of National Intelligence Dan Coats cautioned the administration designating the IRGC could pose dangers to United States forces, according to one source familiar with the matter.
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Iran has warned of a "crushing" response should the United States go ahead with the designation.
Defense officials have told CNN that USA troops in Syria and Iraq often find themselves operating in close proximity to members of the IRGC.
IRGC Commander-in-Chief, Major General Mohammad Ali Jafari said if Washington does so then the U-S military will no longer have calm in West Asia.
Sen. Ben Sasse (R-NE) said he supports the move in a statement.
Former Under-Secretary of State and lead Iran negotiator, Wendy Sherman, said she was anxious about implications for USA forces.
"The IRGC is already fully sanctioned and this escalation absolutely endangers our troops in the region".
Set up after the 1979 Islamic Revolution to protect the Shiite clerical ruling system, the IRGC is Iran's most powerful security organization. Tehran has warned that it has missiles with a range of up to 2,000 km (1,242 miles), putting Israel and United States military bases in the region within reach.