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Congress·In Committee·3 months ago

House Bill Would Strip Tax-Exempt Status from Groups That Support Terrorist Organizations

Legislative Progress

✓ Filed
Review
House
Senate
President

Impacts

Negative Impacts(1)
Immigrant
Hurts
Mixed Impacts(1)
Federal Employee
Neutral

Key Points

  • Congress would let the Treasury Department strip tax-exempt status from nonprofits labeled as “terrorist supporting organizations.”
  • Treasury could make this label if it finds the group gave more than a small amount of “material support” to a terrorist organization within the last 3 years.
  • Before losing tax-exempt status, the group must get a mailed notice and has 90 days to show it didn’t provide support or to try to get the support returned and promise not to do it again.
  • Groups could challenge parts of the decision in IRS Appeals, and courts could review the designation; judges may see classified evidence privately.
  • If enacted, the change would apply to new designations made after the law takes effect, for tax years ending after that date.
TaxesNational SecurityCivil Rights

Milestones

2 milestones2 actions
Dec 17, 2025House

Referred to the House Committee on Ways and Means.

Dec 17, 2025

Introduced in House

What Happens Next

Projected impacts based on AI analysis

As soon as the Act is enacted

Treasury can start designating “terrorist supporting organizations” after the bill becomes law.

Nonprofits with higher-risk overseas work may quickly tighten screening, partners, and payments to avoid losing tax-exempt status.

Before any designation decision

Treasury sends a written notice to a nonprofit before designation.

The notice starts a clock and tells the organization what it is accused of (sometimes with limited details if Treasury says full disclosure could harm security or law enforcement).

Over the 90 days after notice is mailed

90-day “opportunity to cure” period runs after the notice is sent.

The organization must either show it did not provide support, or try to get the support returned and certify it won’t happen again (with limits on repeat certifications).

Right after the 90-day period ends (if no cure)

If the organization does not cure, Treasury designates it and tax-exempt status is treated as suspended starting on the designation date.

The group may face immediate financial and operational fallout: loss of key tax benefits, reputational damage, and possible program shutdowns while it fights the decision.

After designation, timelines vary by case

Disputes over the designation can go to the IRS Independent Office of Appeals, and final decisions can be reviewed in U.S. district court.

Organizations may spend months (or longer) in appeals and court, and some evidence may be reviewed only by the judge if it is classified.

Related News

4 articles
The Conversation·over 1 year ago

What to know about the House bill that could punish nonprofits over alleged 'terrorist' ties

The Stop Terror-Financing and Tax Penalties on American Hostages Act would empower the Treasury Department to eliminate the tax-exempt status of any nonprofit it deems to be supporting terrorism. Scholars warn this could be used to restrict activists and encourage self-censorship.

CL~
The New Republic·almost 2 years ago

This Bipartisan Bill Could Give Trump Huge Power Against His Enemies

House Resolution 6408 hands the Department of Treasury broad new authority to strip nonprofit organizations of their charitable tax status by creating a new category of 'terrorist-supporting organization.' Civil liberties organizations warn it could have sweeping consequences.

L−
Fierce Healthcare·over 1 year ago

Sweeping nonprofit House bill passes, healthcare groups turn attention to Senate

Legislation that gives a president wide-reaching power to financially harm any nonprofit an administration deems as terrorist supporting passed out of the House. Healthcare nonprofits are concerned the definition of terrorism could be loosely applied to attack ideological enemies.

C=

Source Information

Document Type

Congressional Bill

Official Title

To amend the Internal Revenue Code of 1986 to terminate the tax-exempt status of terrorist supporting organizations.

Bill NumberHR 6800
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.