The House of Representatives is set to vote Thursday on a controversial bill that would give the incoming Trump administration new power to muzzle, punish, and effectively shut down tax-exempt organizations without transparency or appropriate due process. The Stop Terror-Financing and Tax Penalties on American Hostages Act, or H.R. 9495, would impact a wide range of tax-exempt organizations, including nonprofits, universities, and even news outlets. Last week, Congress blocked the bill based on due process concerns and significant constituent opposition.
In just a few days, over 100,000 people sent messages to their members asking them to oppose H.R. 9495. Last week’s vote, brought up under suspension, required a two-thirds majority to pass. Tomorrow’s vote will come under regular order and only requires a simple majority.
A coalition of over 180 non-profit organizations, including Planned Parenthood, AFL-CIO, United Auto Workers, and the NAACP, is urging Congress to reject the bill. The coalition warned that the bill is not only dangerous but unnecessary, outlining how future administrations could abuse it to lock in power, silence dissent, and target disfavored groups and vulnerable communities. “Every time we give the president new powers and more authority to act alone, we create an open invitation for abuse by the executive branch,” said Kia Hamadanchy, senior federal policy counsel at the American Civil Liberties Union.
“While we would oppose this legislation no matter who the president is, there is no question it could be weaponized against groups on both ends of the ideological spectrum. The rhetoric we saw on the campaign trail from the president-elect is even more reason for Congress to reject this bill.”
H.R. 9495 joins two unrelated measures together: one allowing the Treasury Department to withhold tax-exempt status from any nonprofit it accuses of being a “terrorist-supporting organization” without being required to disclose the evidence against it, and another, non-controversial measure, which would offer tax relief to Americans imprisoned unjustly abroad. The latter provision has already passed the Senate as a stand-alone bill, and, as the coalition letter notes, none of the groups oppose these tax-relief provisions.
House to decide on H.R. 9495
In fact, not a single member of Congress has thus far raised any opposition to these provisions. The fastest way for it to become law is for the House to simply pass the Senate bill.
Critics warn that this move could target Palestinian advocacy groups and other civil society organizations. Progressive groups argue it could be used to punish political opponents and create a chilling effect on free speech and advocacy work. “There are significant due process concerns with this bill,” said Hamadanchy.
“The stigma of being labeled a terrorist-supporting organization could deter banks from transacting with you and scare off potential donors.”
The bill outlines a process for identifying and sanctioning non-profits, including a 90-day notice period for the non-profit to clear its name before the Treasury issues a final finding. Organizations can seek a review by the IRS or appeal through the courts, but critics warn that even baseless claims could drain non-profits’ resources. “This will chill speech and advocacy because organizations will avoid certain positions to evade this designation,” Hamadanchy added.
Despite the opposition, the bill has a strong likelihood of passing the Republican-controlled House. If signed into law, it is expected to face legal challenges. “This is an executive authority that can be really abused,” Hamadanchy noted.
“That’s why we’re doing everything we can to prevent it from becoming law.”
The coalition continues to urge lawmakers to kill H.R. 9495, citing the dangers it poses to civil liberties and the democratic process.
