Independent Sector has voiced significant concern following the U.S. House of Representatives’ approval of H.R. 9495, a bill that would empower the U.S. Secretary of the Treasury to revoke the tax-exempt status of nonprofit organizations labeled as supporters of terrorism, with minimal oversight.
While Independent Sector recognizes the necessity of preventing misuse of nonprofits for terrorist financing and endorses the bill’s provisions to postpone tax deadlines for individuals wrongfully detained abroad, its current wording raises alarms. The legislation introduces redundancy, creates ambiguity, and endows executive powers that may be prone to misuse, potentially bypassing constitutional protections for due process.
H.R. 9495 would allow the Secretary of the Treasury to classify nonprofits as “terrorist supporting organizations” without providing adequate evidence or justification to those accused. This could lead to unwarranted stigmatization, inflict significant reputational and operational damage on affected organizations, and erode public confidence in the nonprofit sector. Importantly, such measures could hinder the vital contributions of nonprofits and adversely affect the communities they serve.
Independent Sector emphasizes its readiness to work with lawmakers to reinforce existing regulations to safeguard the sector from exploitation. However, it firmly opposes any measures that could unjustly target specific organizations, regardless of their intent. The organization advocates for solutions that satisfy real security needs while upholding the fundamental rights and freedoms essential to American democracy and a diverse civil society.
In a joint statement, Independent Sector, alongside the Council on Foundations, National Council of Nonprofits, and United Philanthropy Forum, expressed collective opposition to H.R. 9495.
This situation presents an opportunity for dialogue and collaboration, highlighting the importance of protecting the integrity of the nonprofit sector while addressing real threats to security. It is crucial that lawmakers recognize the valuable work nonprofits undertake and strive for a legislative approach that balances security and civil liberties.
Summary: Independent Sector is concerned about the passage of H.R. 9495, which gives the Secretary of the Treasury power to revoke nonprofits’ tax-exempt status for suspected ties to terrorism. They support efforts to prevent such misuse but criticize the bill for lack of transparency and potential abuse of power. They highlight the necessity of protecting nonprofits while enhancing security measures, advocating for a balanced approach.