**House Passes Controversial Bill Allowing Treasury to Revoke Nonprofit Tax-Exempt Status**

In a closely watched move, the U.S. House of Representatives passed a bill on Thursday that would grant the Treasury Department unilateral power to withdraw the tax-exempt status of nonprofits it accuses of supporting terrorism. This decision has raised serious concerns among civil liberties advocates, particularly regarding its potential abuse under a second Trump presidency. The bill passed with a vote of 219-184, mostly backed by Republicans, who criticized Democrats for changing their stance on what they call a “common-sense” measure following Donald Trump's reelection earlier this month.

Rep. Jason Smith, Republican chair of the House Ways and Means Committee, argued on the House floor that Democrats would still back the bill if Vice President Kamala Harris had won the presidential election. Emphasizing the need to prevent taxpayer dollars from subsidizing terrorism, Smith stated that members of Congress have a duty to ensure this straightforward principle.

Various nonprofits, however, have voiced significant alarm over the legislation. They argue that the bill could be exploited to target a wide range of organizations, including media outlets, universities, and civil society groups that might fall out of favor with a future administration. Critics argue that the proposed legislation lacks sufficient safeguards to ensure due process for accused organizations.

Rep. Pramila Jayapal, chair of the Congressional Progressive Caucus, denounced the bill as an authoritarian tactic by Republicans. She warned that it would expand executive powers and suppress political dissent. Critics point out that existing U.S. laws already prohibit supporting designated terrorist groups, making additional legislation redundant.

The bill, which now heads to the Democratic-majority Senate, also aims to extend tax filing deadlines for Americans held hostage or unlawfully detained abroad. According to an analysis by the Congressional Research Service, the bill introduces a new category, "terrorist supporting organizations," allowing the Treasury Secretary to designate any nonprofit that has provided support to terrorist groups within the past three years.

Jenn Holcomb, vice president of government affairs at the Council on Foundations, criticized the legislation as overreaching. She highlighted that it grants the Treasury Secretary discretionary power to label a nonprofit as a terrorist organization, without adequate provisions to explain the reasoning behind such decisions.

The bill stipulates that a designated nonprofit has 90 days to appeal the decision. However, entities like the American Civil Liberties Union have criticized the insufficient requirement for the Treasury to disclose all evidence used in making these designations. The bill's text mandates that the Treasury must provide a description of the support, consistent with national security and law enforcement interests.

In a collective statement with the Independent Sector, National Council of Nonprofits, and United Philanthropy Forum, the Council on Foundations also argued that the bill shifts the burden of proof to the nonprofit. Even if cleared, affected organizations risk enduring irreparable harm to their operations and reputations.

Introduced after the Hamas attack on Israel on October 7, 2023, a previous version of the bill passed the House in April with some Democratic support. However, it failed to gain a two-thirds majority last week under a suspension of the rules. Democrat Rep. Rashida Tlaib, the only Palestinian-American member of Congress, announced her staunch opposition ahead of the vote, marking her third time voting against the bill. Tlaib argued that the bill poses significant dangers by allowing unchecked power to target and shut down nonprofit organizations without due process.