WASHINGTON—Unions and progressive organizations of all types are threatened with massive dollar losses by losing their tax-exempt status as non-profit organizations in a bill the House passed on November 21, News Guild President Jon Schleuss warns. It also could be an instrument of repression, he adds. The measure could, for example, be used against an organization a Trump administration decided was in support of Palestinians.
In an emergency e-blast the day before, Schleuss said a key section of a Republican measure, HR9495, would let the Treasury Department—in practical terms, the IRS—unilaterally strip any non-profit group of its federal tax exemption if Treasury found the group funneled “material support or resources” to a terrorist organization. That could mean the shutting down of many organizations.
“This legislation threatens nonprofit workers at ProPublica, The Texas Tribune, Spotlight PA, American Civil Liberties Union affiliates, the Natural Resources Defense Council, the Southern Poverty Law Center and more who are members of The News Guild/CWA,” Schleuss wrote.
“And the legislation also threatens our union itself, because unions are also nonprofits,” Schleuss said.
“Such unilateral power could easily be abused by any future administration to target political opponents, shut down newsrooms, and silence freedom of speech and affiliation in the United States.
The group could sue to get its exemption back, a process that would tie it up in court. Meanwhile, it would have to fork over extra money it otherwise would not have to pay, plus spend to defend itself.
The key section Schleuss cited “would disempower nonprofits and pose a threat to critical organizations supporting communities nationwide. We urge members of Congress to vote NO on HR9495 given inclusion of this provision,” Schleuss wrote.
Not enough did so. HR9495 also eases taxes for U.S. citizens held hostage overseas. It passed 219-184 just before noon on November 21. The tax provision may make it popular in the Senate.
“I’m asking you to contact your U.S. representative TODAY and ask them to vote NO on HR9495 and preserve our free speech and the free press,” Schleuss concluded.
Two other groups that alerted their members about HR9495 weren’t as circumspect as Schleuss. The News Guild’s constitution bars direct statements naming politicians, including endorsements.
Bend the Arc, a Jewish pro-peace group, and the Center for Popular Democracy, which is pro-Palestinian, inserted the name “Trump” in their urgent demands.
The legislation’s author, Republican Rep. Claudia Tenney from far southwestern New York, tried to push the measure through the House the week before under a special procedure which mandates a two-thirds majority vote. She didn’t get it. In the 256-145 roll call, 204 Republicans and 52 Democrats voted for HR9495. One Republican and the rest of the Democrats opposed it.
On November 21, lawmakers didn’t use the special procedure, but approved the measure anyway.
Section 4 of the legislation says the Treasury Secretary shall yank any group’s tax-exempt status after notifying it by mail of the government’s plan to do so. Practically, the IRS would make the call.
The group would have three months to appeal, but must prove to the government that it provides no more than minimal support to “terrorist organizations” on the government’s watch list, and describe what and how much support it gave. Then the Treasury would make the final decision, which could be appealed in court.
But in the meantime, the “terrorist supporter” unilaterally loses its tax exemption, costing it millions of dollars in tax payments.
The legislation is yet another House GOP “messaging” bill, aimed squarely at any group its ruling Republicans allege is supporting Palestinians or others it deems as “terrorist.”
Entire colleges and universities could be punished in a Trump administration. Tenney crafted it after hearings about pro-Palestinian protests on college campuses and allegations that the schools—which are tax-exempt—were supporting terrorists by refusing to call in the cops and arrest, evict and even expel protesters.
In their majority report on the measure, the House’s ruling Republicans declared “current law is inadequate to sufficiently cut off tax-exempt status for U.S. tax-exempt organizations that are materially supporting terrorism.
“Under current law, an entity’s tax-exempt status may be suspended” if the State Department names it as a terrorist organization. Under the new law that would be greatly expanded to groups the government says are, by virtue of any actions, in support of terrorism. State has put several Palestinian organizations on that list.
“Current law does not allow the IRS to suspend the tax-exempt status of organizations identified as having provided material support or resources to a designated terrorist or terrorist-supporting organization,” the GOP claimed. HR9495 would let the IRS do so.
“The non-profit killer bill is back,” Jennifer Flynn, co-chief of campaigns for the Center for Popular Democracy, told its members in another emergency alert. HR9495 “would give Trump’s Treasury Department unchecked power to label any nonprofit a ‘terrorist supporting organization’ and strip it of its tax-exempt status—no due process, no justification.”
The center called Tenney’s bill “a direct attack on free speech and nonprofits that speak up for justice—especially those defending Palestine and demanding resources spent on genocide are redirected to help our communities thrive. It’s especially dangerous since Trump and Republicans are returning to power.”
Bend the Arc, the pro-peace Jewish group, provided an online script its callers could use when they phoned their lawmakers to “protect our right to dissent. We need your voice urgently to protect our ability to organize and dissent under the incoming Trump administration…This bill would actually give Trump the power to investigate and effectively shut down any tax-exempt organization.”
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