Bill Allowing Executive Branch to Target Tax-Exempt Organization Passes U.S. House of Representatives

The U.S. House of Representatives recently passed a controversial piece of legislation, known as HR 9495, that empowers the executive branch by allowing it to target tax-exempt organizations if it determines that the organization supports terrorism.

The bill was introduced by a bipartisan group and has sparked a debate regarding its possible implications for civil liberties and nonprofit organizations.

Possible Concerning Implications

HR 9495 would grant the president and the Secretary of the Treasury unprecedented authority to investigate tax-exempt organizations based on allegations of wrongdoing.

The bill was introduced in response to claims that certain non-profit organizations provide aid to terrorist organizations. Proponents of the bill argue that it is needed to prevent the misuse of tax-exempt status by organizations.

It is a federal crime for nonprofits to provide material support to terrorist groups. However, the Internal Revenue Service (IRS) lacks the authority to revoke the tax-exempt status of organizations involved in these activities.

Critics of the bill argue that it could easily lead to politically-motivated investigations.

Broad and Easily Abused Powers

Civil Rights Organizations like the American Civil Liberties Union (ACLU) have expressed their concern over the legislation and they stand firmly against HR 9495.

In an open letter addressed to the U.S. House of Representatives, the ACLU and over 100 other advocacy groups warned the House that the bill will "grant the executive branch broad and easily abused new powers," and that such powers can be used to suppress dissent and silence organizations that challenge government policies and opposing ideologies.

Advocacy Groups Speak Out

The same advocacy groups expressed worry over the fact that under HR 9495, the Secretary of the Treasury will have the power to classify an organization as "terrorist supporting" without any checks and balances to ensure the classification is accurate.

While any targeted nonprofit can appeal to the IRS or the courts, the financial burden that non-profits would face makes it almost impossible for them to appeal. Legal battles could be financially devastating to many nonprofits that do not have sufficient funds allocated for going to court or dealing with legal matters.

Various groups, including Planned Parenthood, Greenpeace, and Human Rights Watch have all raised alarms about the potential for abuse of power if this bill becomes law.

They argue that it will probably be used to censor and punish nonprofits that disagree with government policy or even belong to another political party than the executive.

While the bill includes provisions aimed at providing relief for hostages held abroad, the broader implications of the bill, should it become law, are uncertain.

While it passed the House narrowly, it is not clear that the Senate will even consider taking up the bill, or if it does that it has the votes to pass. The National Council of Nonprofits has said it does not anticipate the Senate to pass the law in its current form.

After pushback, several lawmakers switched their vote at the last minute to vote against the bill — a similar campaign against it is likely if the Senate considers the bill.

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