S-4136 : Still Just a Bill

The bill S.4136, introduced by Senators Cornyn and King, aims to amend the Internal Revenue Code of 1986 by adding a new paragraph to Section 501(p) that deals with the tax-exempt status of terrorist supporting organizations.

• Termination of Tax-Exempt Status: The bill allows the Secretary to designate an organization as a "terrorist supporting organization" if it has provided material support or resources to a designated terrorist organization within the past three years, exceeding a minimal amount. Once designated, the organization's tax-exempt status would be suspended.
• Designation Procedure: Before designating an organization, the Secretary must notify the organization, giving them 90 days to either demonstrate they did not provide the support or make reasonable efforts to recover the support and certify they will not provide further support.
• Rescission of Designation: The Secretary can rescind a designation if it was erroneous, if the organization did not receive the initial notice and meets certain conditions, or if the supported organizations' suspensions have ended.
• Administrative Review: Organizations can dispute the designation through the Internal Revenue Service Independent Office of Appeals.
• Judicial Review: United States district courts have exclusive jurisdiction to review the final determination of an organization's designation. Classified information may be submitted to the reviewing court ex parte and in camera.
• Effective Date: The amendment applies to designations made after the enactment date in taxable years ending after that date.