HR-6800 : Still Just a Bill

H.R. 6800, titled "To amend the Internal Revenue Code of 1986 to terminate the tax-exempt status of terrorist supporting organizations," proposes to amend the Internal Revenue Code to allow for the *suspension* of tax-exempt status for organizations deemed to support terrorism.

Key provisions of the bill include:

• Definition of Terrorist Supporting Organization: An organization would be designated as a "terrorist supporting organization" if the Secretary of the Treasury determines it has provided more than a minimal amount of material support or resources to a designated terrorist organization within the past three years. This definition explicitly excludes humanitarian aid approved by the Office of Foreign Assets Control (OFAC) and support approved by the Secretary of State with the concurrence of the Attorney General.
• Suspension of Tax-Exempt Status: Upon designation, an organization's tax-exempt status would be suspended. The suspension would begin on the date of designation and end when the designation is officially rescinded.
• Designation Procedure:
  • Before designating an organization, the Secretary must issue a written notice detailing the intent to designate, the terrorist organization(s) supported, and a description of the material support provided. The description may be withheld if disclosure would compromise national security or law enforcement interests.
  • The organization then has a 90-day period to avoid designation by either demonstrating it did not provide the specified support, or by making reasonable efforts to retrieve the support and certifying in writing that it will not provide further support to terrorist organizations. A prior certification within five years would invalidate a new one.
  • If the description of support was withheld due to national security, the organization can file a complaint in a U.S. district court challenging that determination.
• Rescission of Designation: A designation must be rescinded if it is determined to be erroneous, if the organization did not receive proper initial notice and subsequently meets the aforementioned "cure" requirements, or if the periods of suspension for all supported terrorist organizations have ended.
• Review Process: Disputes regarding designations would be subject to resolution by the Internal Revenue Service Independent Office of Appeals. U.S. district courts would have exclusive jurisdiction to review determinations concerning the withholding of information due to national security, and any final designation as a terrorist supporting organization. Classified information relevant to these reviews may be submitted to the court confidentially.

This amendment would apply to designations made after the date of the bill's enactment in taxable years ending after that date.