Bill Giving President New Powers to Strip Nonprofits of Tax-Exempt Status Passes in House: 'Ripe for Abuse'

The House of Representatives passed a bill that would allow the treasury secretary to strip non-profit organizations of their tax-exempt status by recognizing them as supporters of terrorism.

On Thursday, the House passed the Stop Terror-Financing and Tax Penalties on American Hostages Act, or H.R. 9495. The bill was passed by a vote of 219-184 mostly along party lines.

The bill contains a provision allowing the treasury secretary, an appointee of the President, to label a non-profit organization as a "terrorist supporting organization". This label can be designated if it is determined that any organization provided support or resources to a terror group.

The secretary would then be able to revoke an organization's tax-exempt status for however long the designation lasts, which is also up to the secretary, reported USA Today.

According to, Kia Hamadanchy, senior policy counsel at ACLU, this allows for authority that is "ripe for abuse".

The bill also contains a suggested amendment to the Internal Revenue Code in which Americans who are being unjustly detained abroad may have their tax deadlines postponed and may reimburse late fees.

Supporters of the bill, including 15 House Democrats who voted with the majority of Republican representatives in its favor, believe that it allows for the government's stance against terrorism to be reinforced.

"The financing of terrorism and extremism should not have preferential treatment under the U.S. tax code. I think this should be a no-brainer," Rep. David Kustoff said on the House floor Thursday.

The American Civil Liberties Union, NAACP, Greenpeace USA and Planned Parenthood formed a coalition opposing the bill. In a letter sent to representatives, the coalition stated that the bill "creates a high risk of politicized and discriminatory enforcement."

"The potential for abuse under H.R. 6408 is immense as the executive branch would be handed a tool it could use to curb free speech, censor nonprofit media outlets, target political opponents, and punish disfavored groups across the political spectrum," the letter read.

The bill is yet to be voted on by the Senate.