HR5890-119

What This Bill Does

The No Tax Exemptions For Terror Act overrides other law to deny charitable 501(c)(3) treatment to the Council on American-Islamic Relations and any other organization found to have ties to terrorism or terrorist organizations. The rule applies to taxable years ending after the date the Act is enacted. The bill does not create a detailed investigative procedure in the text provided; its operative effect is to remove eligibility for treatment as an organization described in section 501(c)(3) once the named or covered organization falls within the bill's terrorism-ties category.

Who Benefits and How

Federal tax enforcement officials benefit from a direct statutory rule denying charitable exemption to the named organization and similarly covered organizations. Taxpayers opposed to subsidizing organizations tied to terrorism benefit because deductible charitable-exemption treatment would no longer apply to covered organizations. Competing charities not found to have terrorism ties benefit indirectly if donors shift support away from organizations that lose 501(c)(3) status.

Who Bears the Burden and How

The Council on American-Islamic Relations bears the direct burden because the bill names it as ineligible for 501(c)(3) treatment. Other organizations found to have ties to terrorism or terrorist organizations would lose charitable tax-exempt treatment. IRS exempt organizations staff must administer exemption denial for taxable years ending after enactment. Donors to covered organizations may lose the tax advantages associated with gifts to 501(c)(3) organizations.

Key Provisions

• Prohibits section 501(c)(3) treatment for the Council on American-Islamic Relations notwithstanding any other law.
• Prohibits section 501(c)(3) treatment for any other organization found to have ties to terrorism or terrorist organizations.
• Provides that the tax-exemption prohibition applies to taxable years ending after the date of enactment.