Skip to content
Govbase
Govbase
Congress·In Committee·S. 3554

Senate Committee Reviews Bill to Strip Tax-Exempt Status From Terror-Linked Nonprofits

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

3 months ago·View on Congress.gov
Part of: Congress Weighs Revoking Tax-Exempt Status for Nonprofits Supporting Terrorism
⏸

Stalled

No legislative action in over 90 days.

Legislative Progress

Senate
House
President
Law

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.
TaxesNational SecurityCivil Rights

Impact Analysis

Personal Impact

How this policy affects specific groups of people

Negative Impacts(2)
Immigrant
Hurts
Housing Assistance
Hurts
Mixed Impacts(1)
Federal Employee
Neutral

Milestones

2 milestones2 actions
Dec 17, 2025Senate

Read twice and referred to the Committee on Finance.

Dec 17, 2025

Introduced in Senate

What Happens Next

Projected impacts based on AI analysis

Right after the bill becomes law (applies to designations made after enactment, for taxable years ending after enactment)

After enactment, Treasury can start making “terrorist supporting organization” designations

A nonprofit could lose tax-exempt status starting on the designation date, which can quickly affect fundraising, banking, and program operations

Before each designation; notice mailed to the address on the organization’s annual filing

Treasury sends a written notice before any designation

The organization gets a heads-up and can start gathering records, contacting partners, and preparing a response before losing status

Source Information

Document Type

Congressional Bill

Official Title

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

Bill NumberS 3554
Congress119th Congress
ChamberSenate
Latest ActionRead twice and referred to the Committee on Finance.

Sponsor

Cosponsors

(1)
R: 1

Analysis generated by AI. Always verify with official sources.