Possible Targeting of Nonprofits by the Trump Administration

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A tax provision, recently added to a 400-page legislative proposal by the GOP-controlled House Ways and Means Committee, has been approved by the House in the last Congressional session, but did not pass the Senate. This new reform would allow the Treasury secretary to suspend the tax-exempt status of charities the secretary deems have provided “material support or resources” to an organization the government has determined as a terrorist organization.

There are many groups who oppose the new measure, claiming it lacks adequate safeguards to protect organizations' due-process rights. Kia Hamadanchy, a senior policy counsel with the ACLU, explained how it is already illegal to provide material support to a terrorist organization. Hamadanchy emphasizes the danger and issues of this new provision, reinforcing how it gives the Treasury secretary exclusive discretion to designate a group as terrorist-supporting. The agency would be able to suspend a nonprofit’s tax-exempt status “before you’ve had a chance to go before a neutral decision maker like a judge.” Lisa Gilbert, co-president of the liberal watchdog group Public Citizen, said she fears organizations with international networks could become trapped in the chaos if the new provision becomes legal. “Think about foreign humanitarian aid, for example, or groups that receive funds from foundations that are not solely based in the United States,” he said. “There is a lot of activity that could be swept up.”

The bill is currently facing a number of challenges in the House, although the changer’s Republican leaders have said they want to bring it on the floor for a vote next week. If the bill passes the House, organizations who disagree with the language regarding nonprofits’ tax status say they will fight to kill it in the Senate.

A Treasury spokesperson has declined to comment on questions about the bill’s language.