Trump Wants Unilateral Power To Destroy Nonprofits. Congress Can Block It.

This article is part of TPM Cafe, TPM’s home for opinion and news analysis.

If passed, a bill set for a Thursday morning vote in the House would allow the treasury secretary to unilaterally strip the tax-exempt status from any nonprofit organization the secretary chooses to accuse of supporting terrorism. 

It is imperative that the House vote this down, as it would intimidate and even destroy civil-society groups at just the moment when America needs their voices to rise. But H.R. 9495 is also notable as an example of the kind of legislation civil society needs to beware of over the next four years. 

The bill bestows a possibly-unwise-but-not-outrageous amount of power upon the treasury secretary. In other circumstances, an administration could well be counted on to administer such authority responsibly.

But the Trump administration aims to abuse its power from the outset. Every indication we’ve seen is that Trump will direct his Cabinet to punish people and organizations he deems enemies; to that end, this bill would give his treasury secretary an unusually potent weapon to wield.

Most of the language in the Stop Terror-Financing and Tax Penalties on American Hostages Act is just fine. The first three sections postpone tax deadlines and reimburse late fees for Americans who have been wrongfully detained or held hostage abroad. These provisions are commendable.

But Section 4 is a different beast: “Termination of Tax-Exempt Status of Terrorist-Supporting Organizations.” The ability of the government to terminate a nonprofit’s tax status for supporting terrorism is nothing new; current law already allows the IRS to revoke the tax exemption of any group that has been found to provide material support to a terrorist organization. 

But H.R. 9495 discards the current law’s due-process protections; just about any nonprofit group could be dealt a death blow. Existing law recognizes how important a nonprofit’s tax exemption is to its existence. For the IRS to revoke a nonprofit’s tax exemption, it must first perform a full audit, provide the nonprofit with extensive notice, and then prevail in all administrative and judicial appeals.

H.R. 9495 does away with these safeguards. It proposes a system where a nonprofit has 90 days to respond to a unilateral accusation from the treasury secretary that it is supporting terrorist organizations. Unless the secretary has a change of heart, the group loses its tax exemption after the 90 days, and then must fight through administrative and judicial appeals to regain it. 

Worse still, if the treasury secretary bases their accusation on any sort of classified information, the nonprofit will never even see the purported evidence against it; the secretary only has to present the information to a court, should an appeal get that far. This is another aspect of the law that could be abused by a rogue administration; all it takes for regular information to become classified information, according to federal law, is for the President to sign an executive order designating it as such. 

All of this threatens to create a situation where the Trump administration could destroy the nonprofit groups it accuses of supporting terrorist organizations and intimidate many others by holding the constant menace of financial ruin over their heads.

The impending end of this Congress makes the bill’s fate more complicated than the result of an up-or-down vote in the House. Ordinarily, if a bill passes the House, it heads to the Senate. But in this case, because the Senate already passed a different version of the bill, and there’s no time left for a conference committee to reconcile the differences, the bill won’t clear Congress the regular way. If the bill attracts enough support Thursday, it could be attached to a must-pass end-of-year bill like the National Defense Authorization Act and become law. 

H.R. 9495 came up for a vote last Tuesday in the House on its “suspension calendar,” a mechanism requiring a two-thirds majority vote to pass. The bill fell 12 votes short, but the overall tally was 256-145 — more “yes” votes than it needs to pass on Thursday.

Republican House members voted 204-1 for the bill last week, while Democrats largely voted against it, 52-144, with 16 Republicans and 17 Democrats not voting. (You can find the full vote tally here.)  Democracy groups — dozens of which have spoken out strongly against the bill — are rushing to urge those 52 Democratic “yes” votes to reconsider, and working to convince the 17 Democrats who did not vote to vote “no” on Thursday.

The Constitution’s system of checks and balances has been taking a beating of late, and it promises to suffer even more blows during the next Trump administration. This is the worst possible moment to hand the executive branch the ability to silence groups seeking to hold our government to account. For the sake of our democracy and our American right to dissent, any Democrat who did not vote against H.R. 9495 last week would be well-advised to do so this time around.