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Congress·In Committee·12 months ago

Congress Targets Nonprofits Taking Foreign Money With Double Tax Penalties for Political Donations

Also known as: No Foreign Election Interference Act

Legislative Progress

✓ Filed
Review
House
Senate
President

Impacts

Negative Impacts(4)
Immigrant
Hurts
Green Card
Hurts
Visa Holder
Hurts
Undocumented
Hurts

Key Points

  • Creates a new tax penalty for certain nonprofits that donate to political committees after receiving any foreign-national gift.
  • The penalty is twice the amount of the political donation if the nonprofit took a foreign-national contribution at any time in the past 8 years.
  • Applies to larger nonprofits (at least $200,000 in yearly receipts or $500,000 in assets).
  • If a nonprofit makes more than 2 of these banned political donations, it would lose its federal tax-exempt status going forward.
  • Would take effect for covered political donations made on or after January 1, 2026.
TaxesEconomyCivil RightsConsumer ProtectionTrade

Milestones

2 milestones2 actions
Mar 21, 2025House

Referred to the House Committee on Ways and Means.

Mar 21, 2025

Introduced in House

What Happens Next

Projected impacts based on AI analysis

After the law is enacted and before 2026 contributions

Nonprofits adjust donation and recordkeeping rules to identify foreign-national gifts

Some organizations may add donor questions, require proof of status, or refuse certain donations to avoid future penalties tied to political giving.

Starting on the enactment date, then rolling forward

8-year lookback window starts building for each nonprofit after enactment

Over time, a single foreign-national donation can affect whether a later political committee contribution triggers penalties, for up to 8 years (but not counting time before the law is enacted).

After a covered nonprofit makes 3 disqualified contributions (timing varies by organization)

Loss of tax-exempt status can occur after a third disqualified contribution

A nonprofit that keeps making disqualified political committee contributions risks becoming taxable, which can reduce money available for its mission and may change fundraising plans.

Related News

4 articles
Nossaman LLP (Government Relations & Regulation Group)·over 1 year ago

Compliance Notes - Vol. 5, Issue 30

Digest item summarizing the No Foreign Election Interference Act (H.R. 8314): bars certain tax-exempt nonprofits from donating to political committees if they received foreign-national funds in prior 8 years; 200% penalty and loss of exemption after >2 violations.

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Deloitte (Tax News & Views)·almost 2 years ago

Tax News & Views (May 17, 2024 edition)

Explains the No Foreign Election Interference Act (H.R. 8314): eight-year ban on political committee donations after receiving foreign-national gifts; 200% excise-style penalty for first two violations and tax-exempt status loss on a third.

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Yahoo News (syndicated “Congress Votes” recap)·over 1 year ago

Congress Votes (House vote rejects No Foreign Election Interference Act)

Vote recap noting the House rejected the No Foreign Election Interference Act (H.R. 8314) aimed at increasing penalties for tax-exempt groups contributing to PACs after receiving foreign funding; includes vote tally and floor arguments.

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Source Information

Document Type

Congressional Bill

Official Title

No Foreign Election Interference Act

Bill NumberHR 2265
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred to the House Committee on Ways and Means.

Sponsor

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.