Gaza and Charities at War: Growing Opposition to Terrorism Tax Exemption Revocation Bill
One hundred and thirty-five charities have signed a letter to Senate Finance opposing the Terrorism Tax Exemption Revocation Bill working its way through Congress. I understand the fears, but I still think the bill is an improvement over the authority that already exists under IRC 501(p). Under current law, there is absolutely no process protecting charities from what amounts to a administratively imposed death penalty. An organization’s designation as a supporter of terrorism under currently law immediately freezes all the organization’s assets and criminalizes transactions with the organization. No prior notice, opportunity to cure, or administrative appeal. No nothing. So the Bill adds some seriously needed due process where none exists right now. Still, its a legitimate assertion that the Bill is motivated by an effort to shut down pro-Palestinian organizations ascendant around the country. Here is part of the May 6, 2024 letter:
Dear Chairman Wyden and Ranking Member Crapo,
On behalf of the 134 undersigned civil liberties, human rights, community, faith, and privacy organizations, we respectfully request that the United States Senate Committee on Finance refrain from advancing consideration of H.R. 6408, and its companion bill S. 4136, introduced by Senators John Cornyn and Angus King. This proposed legislation would unconstitutionally harm all Americans’ free speech and due process rights by creating new executive authorities that could be abused by any presidential administration seeking to terminate the tax-exempt status of nonprofit organizations arbitrarily. If enacted, this act would grant the Secretary of the Treasury broad discretionary powers to terminate the tax-exempt status of nonprofit organizations based solely on a subjective declaration that they are “terrorist supporting organizations.”
This proposal lacks sufficient accountability measures and opens the door to potential abuse, especially given the current climate of increased politicization and polarization within the U.S. government. We draw attention to recent incidents where state governors and entities such as state and private universities, with vocal support from some members of Congress, have attempted to revoke the status or ban student-led chapters of Jewish and Palestinian groups organizing in support of Palestinian human rights.
These actions underscore the danger of unchecked authority that could be wielded by an administration that does not respect the Bill of Rights to stifle free speech and legitimate advocacy efforts to petition the government. Furthermore, this act seems to be motivated by an anti-Palestinian bias aimed at stifling voices advocating for Palestinian human rights, especially in light of Israel’s deadly invasion of Gaza, resulting in over 34,000 civilian deaths and nearly 80,000 injuries. While this may be the primary concern for lawmakers backing this act, if it becomes law, it could be exploited by a hostile presidential administration to target organizations for political reasons, irrespective of their ideological stance.
Maybe I need to go back and study the bill and current law a little more. Motivations might be bad, but I still think the Bill is an improvement over the status quo ante.
darryll k. jones