A bill 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 it says gave more than minimal “material support” to a terrorist group.
• Treasury would have to send a written warning first, then give the organization 90 days to prove it didn’t help, or show it tried to get the support back and promise not to do it again.
• Some support would be excluded if it was approved by the State Department and Justice Department, or if it was humanitarian aid approved through Treasury’s sanctions office.
• If designated, the nonprofit’s tax benefits would be suspended starting on the designation date and could return only if Treasury later rescinds the designation.
• The bill sets up ways to challenge the decision, including review through an IRS appeals office and lawsuits in federal district court; classified evidence could be shown to a judge privately.