By: Stephanie Kalota
Founder, Veteran Legislative Voice & AHG Correspondent
Shortly before Thanksgiving, the House of Representatives passed H.R. 9495, the Stop Terror-Financing and Tax Penalties on American Hostages Act, which greatly concerned many non-profit organizations. Part of this bill is a well-needed correction to tax law, that postpones deadlines for filing taxes for those that are wrongfully detained abroad. This could also be applied to the spouse of the detained individual so that they could be eligible for maximum
benefits.
What has concerned non-profit organizations is section four of the bill, “Termination of Tax-Exempt Status of Terrorist Supporting Organization.” Within this section, the Treasury Secretary (who is under the leadership of the President) could designate a non-profit organization as a
“terrorist supporting organization” which strips them of their tax-exempt status. This law doesn’t
require any due process or formal investigation from professionals like the FBI or CIA. It does allow for administrative review underneath the Treasury Secretary’s Department of Internal Revenue Service Independent Office of Appeals, and it allows the U.S. Court System to have exclusive jurisdiction to review a final determination.
Bear in mind that these federal judges could also be the president’s appointee, and just being appointed by them has not required these judges to recuse themselves for possible conflict of interest.
There are a number of organizations that have spoken out against this legislation in hopes of
preventing the Senate from acting on this bill. The NAACP has stated that “With H.R. 9495, the incoming administration is threatening to use their power to undermine our freedoms by
dismantling tax-exempt organizations they don't like. Now, civil society groups across the
political spectrum are at serious risk, including the NAACP.” The Utah Non-Profits Association stated that this “ is a bill that would devastate our communities, our organizations, and our
democracy. It would let the Executive Branch unilaterally shut down any nonprofits they disagree with, without due process. The potential for overreach, subjective application, and abuse of this legislation is enormous, and the consequences for organizations and the people
they serve cannot be overstated. As nonprofits, we have the right under the 1st amendment to protest and advocate for or against legislation that will directly impact our sector, and with this bill, this right is at risk.”
But how would this impact everyday Americans? This could prevent people in this country from receiving the care that they need in times of emergency because these organizations are spending more money protect them legally, or not speaking up and advocating for those that
need it.
