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

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.