House Democrats sharply reduced their support for a bill granting the IRS authority to revoke tax-exempt status for nonprofits supporting terrorism. Passed 219-184, the bill saw backing from only 15 Democrats, down from 52 last week and 179 in April. Critics, including the ACLU and Ben & Jerry’s, warned the measure could be exploited by the incoming Trump administration for political retaliation.
House Ways and Means Chairman Jason Smith (R-MO) criticized Democrats for shifting their stance despite earlier bipartisan support. He argued that due process concerns were addressed in the bill, which also waives tax penalties for Americans wrongfully detained abroad.
Rep. Steny H. Hoyer (D-MD) explained his vote change, citing concerns over potential misuse by a Trump-led Treasury Department, despite agreeing with the bill’s intent. Similarly, Rep. Debbie Dingell (D-MI) noted she initially supported the legislation due to its provisions for former hostages but objected after realizing its broader implications.
The bill extends IRS authority to strip tax-exempt status from groups aiding terrorists within three years. Organizations would have 90 days to dispute such designations, which could be appealed through district courts. Critics argued the process risked abuse.
As Democratic backing falters, the Senate is unlikely to advance the combined bill. However, standalone measures for hostage tax relief may still proceed, with bipartisan support in both chambers.
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