[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5603 Engrossed in House (EH)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
107th CONGRESS
  2d Session
                                H. R. 5603

_______________________________________________________________________

                                 AN ACT


 
 To amend the Internal Revenue Code of 1986 to suspend the tax-exempt 
 status of designated terrorist organizations, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SUSPENSION OF TAX-EXEMPT STATUS OF DESIGNATED TERRORIST 
              ORGANIZATIONS.

    (a) In General.--Section 501 of the Internal Revenue Code of 1986 
(relating to exemption from tax on corporations, certain trusts, etc.) 
is amended by redesignating subsection (p) as subsection (q) and by 
inserting after subsection (o) the following new subsection:
    ``(p) Suspension of Tax-Exempt Status of Designated Terrorist 
Organizations.--
            ``(1) In general.--The exemption from tax under subsection 
        (a) with respect to any organization shall be suspended during 
        any period in which the organization is a designated terrorist 
        organization.
            ``(2) Designated terrorist organization.--For purposes of 
        this subsection, the term `designated terrorist organization' 
        means an organization which--
                    ``(A) is designated as a terrorist organization in 
                or pursuant to an Executive order or otherwise under 
                the authority of--
                            ``(i) section 212(a)(3) or 219 of the 
                        Immigration and Nationality Act,
                            ``(ii) the International Emergency Economic 
                        Powers Act, or
                            ``(iii) section 5 of the United Nations 
                        Participation Act, or
                    ``(B) is designated in or pursuant to an Executive 
                order or otherwise as supporting terrorist activity (as 
                defined in section 212(a)(3)(B) of the Immigration and 
                Nationality Act) or terrorism (as defined in section 
                140(d)(2) of the Foreign Relations Authorization Act, 
                Fiscal Years 1988 and 1989).
            ``(3) Denial of deduction.--No deduction shall be allowed 
        under section 170, 545(b)(2), 556(b)(2), 642(c), 2055, 
        2106(a)(2), or 2522 for any contribution to an organization 
        during the period such organization is a designated terrorist 
        organization.
            ``(4) Denial of administrative or judicial challenge of 
        suspension or denial of deduction.--Notwithstanding section 
        7428 or any other provision of law, no organization or other 
        person may challenge a suspension under paragraph (1), a 
        designation described in paragraph (2), or a denial of a 
        deduction under paragraph (3) in any administrative or judicial 
        proceeding relating to the Federal tax liability of such 
        organization or other person.
            ``(5) Erroneous designation.--
                    ``(A) In general.--If a designation of an 
                organization pursuant to 1 or more of the provisions of 
                law described in paragraph (2) is determined to be 
                erroneous pursuant to such law and the erroneous 
                designation results in an overpayment of income tax for 
                any taxable year with respect to such organization, 
                credit or refund (with interest) with respect to such 
                overpayment shall be made.
                    ``(B) Waiver of limitations.--If credit or refund 
                of any overpayment of tax described in subparagraph (A) 
                is prevented at any time before the close of the 1-year 
                period beginning on the date of the determination of 
                such credit or refund by the operation of any law or 
                rule of law (including res judicata), such refund or 
                credit may nevertheless be made or allowed if claim 
                therefor is filed before the close of such period.''.
    (b) Notice of Suspensions.--If the tax exemption of any 
organization is suspended under section 501(p) of the Internal Revenue 
Code of 1986 (as added by subsection (a)), the Internal Revenue Service 
shall update the listings of tax-exempt organizations and shall publish 
appropriate notice to taxpayers of such suspension and of the fact that 
contributions to such organization are not deductible during the period 
of such suspension.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

            Passed the House of Representatives October 16, 2002.

            Attest:

                                                                 Clerk.
107th CONGRESS

  2d Session

                               H. R. 5603

_______________________________________________________________________

                                 AN ACT

 To amend the Internal Revenue Code of 1986 to suspend the tax-exempt 
 status of designated terrorist organizations, and for other purposes.