HR2265-119

What This Bill Does

The No Foreign Election Interference Act adds Internal Revenue Code section 6720D. A specified tax-exempt organization that makes a disqualified political committee contribution must pay a penalty equal to twice the amount of the contribution. A contribution is disqualified when a section 501(c) organization gives to a political committee and the organization received a contribution or gift from a foreign national during the testing period. The testing period is generally the eight-year period ending on the date of the political contribution, excluding any period before enactment. The bill therefore does not directly ban the political contribution; it creates a large tax penalty designed to discourage politically active tax-exempt organizations from routing money to political committees after accepting foreign-national support.

Who Benefits and How

Voters concerned about foreign influence benefit because tax-exempt groups with foreign-national gifts face a strong penalty if they contribute to political committees. Campaign finance watchdog organizations benefit from a clear tax-law enforcement hook tied to foreign-national contributions. Political committees benefit from clearer incentives to scrutinize contributions from tax-exempt organizations with foreign-national donor exposure. IRS exempt-organization examiners benefit from a defined penalty formula equal to twice the covered political contribution.

Who Bears the Burden and How

Specified 501(c) organizations must track foreign-national gifts across the eight-year testing period before making political committee contributions. Tax-exempt advocacy groups accepting foreign-national contributions face a penalty equal to twice any disqualified political committee contribution. IRS penalty administrators must enforce new section 6720D and define affected organizations and testing periods. Political committees may lose contributions from tax-exempt organizations that cannot absorb the penalty risk.

Key Provisions

• Creates a new section 6720D penalty for covered tax-exempt organization contributions to political committees.
• Requires the penalty to equal twice the disqualified political committee contribution.
• Defines disqualified contributions by reference to foreign-national gifts received during an eight-year testing period.
• Applies the testing period only after enactment for pre-enactment years.