Rep. Lloyd Smucker
The U.S. House Ways and Means Committee on May 15 voted unanimously to approve legislation led by U.S. Rep. Lloyd Smucker (R-PA) that would require the public disclosure of grants made by certain tax-exempt organizations to foreign entities.
The Foreign Grant Reporting Act, H.R. 8290, which Rep. Smucker sponsored on May 8, now heads to the full chamber for action.
“Since the horrific Oct. 7, [2023] terrorist attacks in Israel, we have seen a surge of anti-Semitic and anti-American protests in cities and on college campuses,” Rep. Smucker said prior to the committee’s 38-0 vote.
“Tax-exempt organizations such as National Students for Justice in Palestine and American Muslims for Peace are currently under investigation for possibly providing material support to Hamas, which is a designated Foreign Terrorist Organization,” he said. “These tax-exempt entities can take advantage of a loophole in the tax code which doesn’t require 501c’s to disclose any grants they provide to foreign entities.”
Since such tax-exempt entities aren’t required to disclose information about grants they provide to foreign entities, the congressman said that there’s little transparency into whether these grants may end up supporting terrorism or other malicious actions, intentionally or indirectly.
“When the tax-exempt sector provides grants to domestic entities, they are already required to disclose information about the recipients in their annual tax filings,” said Rep. Smucker. “My legislation will bring parity to this situation.”
Specifically, H.R. 8290 would require 501(c) organizations to include basic information about the grants they provide to foreign entities in their annual tax filings, he added.