US House Approves Bill Granting Treasury Authority to Target Nonprofits Allegedly Supporting Terrorism

The US House has approved a bill granting the Treasury Department the power to revoke the tax-exempt status of nonprofits accused of supporting terrorism. This move has raised concerns among civil liberties groups about potential misuse under a future Trump administration. The legislation passed with a 219-184 vote, primarily backed by Republicans, who criticised Democrats for withdrawing support after Donald Trump's recent re-election.

Rep. Jason Smith, chair of the House Ways and Means Committee, argued that Democrats would have supported the bill if Vice President Kamala Harris had won. He emphasised Congress's responsibility to prevent taxpayer money from funding terrorism. However, nonprofits fear the bill could target organisations like news outlets and universities that a future administration might oppose, citing insufficient due process.

Concerns Over Executive Power Expansion

Rep. Pramila Jayapal, chair of the Congressional Progressive Caucus, described the bill as an authoritarian move by Republicans to expand executive powers and suppress dissent. Critics argue that supporting designated terrorist groups is already illegal in the US, making this proposal redundant. The bill now heads to the Democratic-controlled Senate, where its outcome remains uncertain.

The legislation also aims to delay tax filing deadlines for Americans held hostage or unlawfully detained abroad. According to a Congressional Research Service analysis, it introduces a new category called "terrorist supporting organizations," defined as those providing material support to terrorists within three years.

Jenn Holcomb from the Council on Foundations expressed concerns about overreach, stating that the Treasury Secretary could label a nonprofit as terrorist-supporting at their discretion. She highlighted the lack of clarity for nonprofits regarding such designations. The bill allows 90 days for appeals but doesn't require full disclosure of evidence used in designations.

Impact on Nonprofits and Legal Challenges

The American Civil Liberties Union and other nonprofits argue that the bill shifts the burden of proof onto them. Even if cleared, organisations risk significant damage to their operations and reputation. The legislation could affect various nonprofits, including unions and private foundations.

Initially introduced after Hamas's attack on Israel on October 7, 2023, a previous version passed in April with some Democratic support. Last week, it failed to achieve the two-thirds majority needed under suspension rules.

Democrat Rep. Rashida Tlaib, Congress's sole Palestinian-American member, opposed the bill for the third time before Thursday's vote. She stated, "I don't care who the president of the United States is," calling it dangerous and unconstitutional for allowing unchecked power against nonprofits without due process.

The debate surrounding this legislation highlights ongoing tensions between national security measures and civil liberties protections in the US legislative landscape. As it moves to the Senate, its implications for nonprofit organisations remain a focal point of concern among critics and supporters alike.