Giving Compass' Take:
- Jeremy Lindenfeld explains the effect H.R. 9495 could have on nonprofits and the ripple effect for donors.
- How might H.R. 9495 change the ways donors give?
- Learn more about issues related to philanthropy.
- Search Guide for Good for nonprofits in your area.
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A controversial bill, described by critics as a calculated strike against pro-Palestinian groups, cleared the House of Representatives in November but stalled in the Senate as the session came to a close. The legislation, however, is expected to resurface in the new Congress, where it could gain fresh momentum. Analysts warn the measure could be wielded as a powerful tool to silence a broad spectrum of organizations at odds with President Donald Trump’s agenda, far beyond those protesting the war in Gaza. To many observers, the bill underscores a growing willingness among Republicans to help Trump target his political adversaries.
But it’s not just Republicans who supported the legislation. H.R. 9495, or the Stop Terror-Financing and Tax Penalties on American Hostages Act, initially garnered the support of 52 House Democrats before a public pressure campaign reduced the number to 15. With Republicans controlling both chambers next Congress, the bill could pass the House and Senate on a party line vote and send shockwaves through the nonprofit ecosystem.
H.R. 9495 would grant the secretary of the treasury the ability to strip nonprofit organizations of their tax-exempt status if they are deemed “terrorist supporting organizations,” and if those organizations fail to successfully appeal within 90 days of being notified.
During a House floor speech before a vote on the bill, Republican Congressman and Chairman of the Ways & Means Committee Jason Smith said H.R. 9495 was necessary to stop “abuse of our tax code that is funding terrorism around the world.”
But the Internal Revenue Service already has a process for revoking the tax-exempt status of nonprofits found to be supporting terrorist organizations, which has critics like Kia Hamadanchy, senior policy counsel at the American Civil Liberties Union, calling the bill “a solution for which there is no problem.”
According to Hamadanchy, H.R. 9495 would allow the treasury secretary to bypass formal investigations and label nonprofits as terrorist-supporting organizations without providing evidence.
Read the full article about impact of HR 9495 by Jeremy Lindenfeld at Fast Company.