Rep. Jason Smith (R-Mo.), chair of the U.S. House Ways and Means Committee, advocated for H.R. 9495, legislation that seeks to counter charities abusing the nonprofit system for terror groups and support victims of terrorism abroad.
“This bill is about stopping the abuse of the tax code by organizations that support terrorism, and ensuring that those who are held against their will by foreign governments or terrorists don’t suffer further from tax penalties when they return home to America,” he said in a Tuesday speech on the House floor.
Smith noted that in the wake of the Hamas terror attacks in Israel on Oct. 7, 2023, “we have discovered material support for terrorist organizations like Hamas right here in the United States, much of which have been funded by tax-exempt organizations receiving money from American taxpayers.”
He called for denials of tax-exempt status for entities “found to have provided material support to a terrorist organization. We must starve the aggressors of the resources they need to commit more atrocities.”
Citing an example of a case inspiring the bill, the congressman related that “one U.S.-based tax-exempt organization hired a so-called journalist in Gaza, who was a member of Hamas and was literally holding Israelis taken hostage on Oct. 7 in his own home. He was paid using tax-exempt funds. That organization is still an operating tax-exempt organization here in the U.S. today.”
The bill also aims to address the financial problems of former hostages.
“We must honor the struggle of these victims. Unfortunately, they are made to suffer unintentionally due to aspects of our tax code,” said Smith. “When those who are wrongfully detained around the world—whether by terrorists or by governments—finally return to America, they could be subjected to tax bills, including penalties and interest on taxes that went unpaid during their captivity.”
