Reported by MATTHEW PETTI

A bipartisan bill would give the secretary of the treasury unilateral power to classify any charity as a terrorist-supporting organization, automatically stripping away its nonprofit status. The bill, H.R. 6408, already passed the House of Representatives in November, and a companion bill, S. 4136, was introduced to the Senate by Sens. John Cornyn (R–Texas) and Angus King (I–Maine) last week.

In theory, the bill is a measure to fight terrorism financing. At least, that’s what sponsor Rep. David Kustoff (R–Tenn.) claimed. “I urge the swift passage of this legislation that will significantly diminish the ability of Hamas and other terrorist groups to finance their operations and carry out future attacks,” he said in a November statement.

Financing terrorism is already very illegal. Anyone who gives money, goods, or services to a U.S.-designated terrorist organization can be charged with a felony under the Antiterrorism Act and the International Emergency Economic Powers Act. And those terrorist organizations are already banned from claiming tax-exempt status under section 501(c)(3) of the tax code. Nine charities have been shut down since 2001 under the law.

The new bill would allow the feds to shut down a charity without an official terrorism designation. It creates a new label called “terrorist-supporting organization” that the secretary of the treasury could slap onto nonprofits, removing their tax exempt status within 90 days. Only the secretary of the treasury could cancel that designation.

In other words, the bill’s authors believe that some charities are too dangerous to give tax exemptions to, but not dangerous enough to take to court. Although the label is supposed to apply to supporters of designated terrorist groups, nothing in the law prevents the Department of the Treasury from shutting down any 501(c)(3) nonprofit, from the Red Cross to the Reason Foundation.

Read full report: https://reason.com/2024/04/24/this-bill-would-give-the-treasury-nearly-unlimited-power-to-destroy-nonprofits/