Nov. 20, 2024
This week, the U.S. House of Representatives is expected to once again consider the “Stop Terror-Financing and Tax Penalties on American Hostages Act” (H.R. 9495), which targets relief for hostages of terrorists while ostensibly strengthening tools to curb terrorism financing. However, the bill would give the U.S. treasury secretary nearly unfettered power to revoke the tax-exempt status of charitable nonprofits.

Hundreds of tax-exempt organizations around the country, including news outlets, universities, labor groups, faith-based organizations, human rights advocates and civil society groups, are urging Congress to vote NO on this bill.

Click here to take action now.

There are many alarming risks, specifically:

The bill grants the treasury secretary virtually unfettered power to designate 501(c) nonprofits as “terrorist-supporting organizations” without requiring full evidence disclosure or meaningful due process.

  1. Undermined Constitutional Protections: The legislation:
    • Reverses standard legal protections by placing the burden of proof on accused organizations
    • Provides only 90 days to demonstrate innocence before tax-exempt status revocation
    • Does not require disclosure of reasons or evidence for designation
  2. Potential for Systemic Abuse: The legislation could be weaponized to:
    • Curb free speech
    • Censor nonprofit media outlets
    • Target political opponents across the ideological spectrum
    • Punish disfavored groups
  3. Devastating Organizational Consequences: Even if an organization successfully challenges a designation, the mere implication of terrorist association could:
    • Destroy financial relationships
    • Eliminate donor trust
    • Compromise community standing
    • Potentially cause organizational collapse before legal recourse
  4. Humanitarian Aid Risks: Organizations could be stripped of tax-exempt status for providing legitimate humanitarian assistance in conflict zones, even when operating under established legal authorizations.

It is already a federal crime to provide material support to terrorist organizations. Existing laws and mechanisms for investigation and prosecution are sufficient. This legislation represents an unnecessary and dangerous expansion of executive power that threatens civil society’s fundamental operations.

 The League has contacted members of our Congressional delegation urging them to vote NO if the bill comes to a vote this week. We hope you will take a moment to contact your Representative to oppose the bill. Click here to take action now.