Nonprofit Association of the Midlands
Editor’s note: The bill in question passed in the U.S. House of Representatives Thursday morning on a 219-184 vote, mostly along partisan lines, with Republicans in support and Democrats opposing. 15 Democrats broke with their caucus to vote in favor of the bill. Read more.
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The Nonprofit Association of the Midlands (NAM), an organization that works with nonprofits across Nebraska and Western Iowa, is asking people to contact their representative and ask them to vote “no” on a controversial bill in the house — H.R. 9495.
The bill, dubbed the “Stop Terror-Financing and Tax Penalties on American Hostages Act,” has two parts. First, it would postpone certain tax filing deadlines for U.S. citizens and their spouses who are unlawfully detained or held hostage abroad.
Second, the bill would terminate the tax-exempt status of “terrorist supporting organizations.”
…and what constitutes an organization that supports terrorist? This aspect, according to NAM, could seriously harm nonprofits.
Under the current writing of the bill, the Secretary of the Treasury is given unilateral discretion to designate section 501(c) nonprofits as “terrorist supporting organizations,” without requiring the Secretary to share their full evidence or reasoning with accused nonprofits.
“We don’t know where that line is,” Hannah Young, NAM’s Public Policy Manager, tells KLIN News.
“If you are accused, you only have 90 days to demonstrate that you are innocent or your tax exempt status could be revoked,” Young continued. “This would place the burden of proof on the nonprofit, without clear reasoning as to why they would be deemed as a terrorist supporting organization. That runs counter to constitutional due process protections”
Essentially, the tax-exempt status enjoyed by 501(c) nonprofits does-away with certain taxes they would otherwise have to pay, while also allowing donors to these nonprofits to claim their contributions as tax deductible.
“If that were revoked, that would really add a burden to nonprofits,” said Young. When revoked, nonprofits would effectively adopt the same tax structure of a business.
Young also fears the harm that could be done to a nonprofit’s reputation if these accusations are levied falsely.
“If a nonprofit is accused of being a ‘terrorist supporting organization,’ and a couple months later we find out they are not… That damage is already done in the accusation,” she said.
Further, Young says this bill is unnecessary, as providing material support to a foreign terrorist organization was already made illegal in the Antiterrorism and Effective Death Penalty Act of 1996.
“It’s a solution to a problem that already has a solution,” she said.
Young acknowledges a possible good intention with this bill, but says this isn’t the best way to address the problem.
H.R. 9495 has been panned by some groups, such as the American Civil Liberties Union (ACLU), as a way to “give the incoming Trump administration new power to muzzle, punish, and effectively shut down tax-exempt organizations without transparency or appropriate due process.”
Other groups, like the Arab American Institute, say the bill would open the door for organizations advocating for Palestinian rights and humanitarian practices to be wrongly labeled as providing support for terrorism.
“This vague and expansive legislation would disproportionately target groups working on these issues, especially in the context of the genocide in Gaza,” AAI said in a statement.
NAM is encouraging Nebraskans to contact their Representative in the U.S. House, and ask them to vote down H.R. 9495.
The House is set to take up the bill for a second time today, Thursday, Nov. 21, after previously failing to pass with 2/3 majority.
Nebraska Representatives Mike Flood (NE-01), Don Bacon (NE-02), and Adrian Smith (NE-03) previously voted “yes” on the bill.
Residents can call their representative by calling (202) 224-3121 for the U.S. House switchboard operator.