A bill to amend the Internal Revenue Code of 1986 to terminate the tax-exempt status of terrorist supporting organizations.

Groups could lose tax-exempt status

If enacted, this bill would let the Treasury Secretary designate an organization as a "terrorist supporting organization" and treat it like a group that loses tax-exempt status. Designation would apply when, during the 3 years before designation, the group provided material support above a de minimis amount (as defined in federal terrorism law), but not support approved by the Secretary of State with the Attorney General's concurrence or humanitarian aid approved by OFAC. The Secretary must mail a written notice to the group's most recent address and give a 90-day chance to show it did not provide support, to have support returned and certify it will not give more (a repeat certification is barred for 5 years), or to challenge withheld disclosure in federal court. The designation starts the suspension period on the date of designation and ends only if the Secretary rescinds the designation for specific reasons; appeals use the IRS Independent Office of Appeals and federal district courts, and classified evidence can be submitted privately to courts. These rules would apply only to designations made after enactment for taxable years ending after that date.