A bipartisan bill that would remove the tax-exempt status of U.S.-based organizations found to be materially supporting terrorist organizations passed the U.S. House of Representatives on Nov. 21.
The House voted 219-184 to approve the Stop Terror-Financing and Tax Penalties on American Hostages Act, H.R. 9495, which now heads to the U.S. Senate for consideration.
If enacted, the bill would also prevent the Internal Revenue Service (IRS) from charging penalties or assessing interest on taxes owed by Americans who have been held hostage or wrongfully detained abroad—language offered by U.S. Rep. French Hill (R-AR) from the bipartisan Stop Tax Penalties on American Hostages Act of 2024, H.R. 7791, which he proposed in March alongside bill sponsor U.S. Rep. Dina Titus (D-NV).
“After suffering an unfathomable experience as a hostage or wrongful detainee, the last thing Americans who were held against their will should receive is a notice from their own government telling them they owe penalties for taxes missed under circumstances far beyond their control,” said Hill, co-chair of the Hostage Task Force.
The legislation, he added, “eases that burden and corrects a crucial gap in our laws that punishes these Americans by burdening them with penalties and fines from the IRS after they return home.”
H.R. 9495 is the latest step in the U.S. House Ways and Means Committee’s ongoing fight to root out support for terrorist organizations and antisemitism in the tax code.
For months, the committee has investigated a pattern of tax-exempt organizations that are operating in the United States and have traceable ties to terrorism, according to committee chairman U.S. Rep. Jason Smith (R-MO).
To advance the bill, the House overcame a Nov. 12 block of the bill by Democrats who voted against it, even though the Ways and Means Committee had approved it with unanimous support.
“Why? Because President Trump won the election,” Smith said in his opening statement Nov. 21 prior to the House vote. “Don’t take my word for it. Our Democrat colleagues said it themselves on this floor.”
U.S. Reps. Claudia Tenney (R-NY) and Brad Schneider (D-IL) introduced H.R. 9495 on Sept. 9. The Ways and Means Committee Sept. 11 voted 38-0 to approve it before sending it to the full chamber for action.