A provision that would have allowed the US treasury secretary, appointed by the president, to unilaterally strip a nonprofit of its tax-exempt status if deemed to be a “terrorism supporting organization” (a standard undefined in the bill), has been dropped from Republican-led tax legislation making its way through Congress.
The language, buried in hundreds of pages of the proposed tax legislation, was essentially a carbon copy of a bill introduced in the House last year, known as HR 9495, which passed the House but died without action in the Senate.
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Nonprofit advocacy groups and civil libertarians warned that such a measure would empower the Trump administration to arbitrarily target any nonprofit that runs afoul of its political agenda.
The defeat of the measure, for now, has those advocates celebrating what they call a win for nonprofits and a demonstration of the power of the advocacy and mobilization by the nonprofit sector and its allies.
As National Council of Nonprofits President and CEO Diane Yentel wrote on LinkedIn:
Good News Update: Advocacy works!
House Republicans have *removed* (for now) a provision from the tax bill that would have granted unprecedented authority to the Executive Branch to revoke nonprofit status from organizations without due process! National Council of Nonprofits and others warned that this provision would have allowed Administrations to weaponize the federal government by targeting charitable organizations based on ideological grounds.
This is important progress in preventing harm to the entire nonprofit sector in the tax bill, and validation that our collective advocacy is working! We’ll continue to closely monitor the bill as it advances in Congress. The bill is headed to the House floor for a vote as soon as this week.
In a statement sent to NPQ on Tuesday, CalNonprofits CEO Geoff Green said, “This provision was the latest attempt by the administration to weaponize the federal government against those who it sees as a threat to its ideology. Nonprofits pushed back hard and won. It’s a win for civil society, for democracy, and for free expression.”
Due to closed-door negotiations on the bill, information about which House members supported or opposed the measure in the Republican-led tax bill is not available; the similar HR 9495 bill last year passed the House largely along party lines with most Democrats, though not all, opposing it.
