[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4136 Introduced in Senate (IS)]

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118th CONGRESS
  2d Session
                                S. 4136

To amend the Internal Revenue Code of 1986 to terminate the tax-exempt 
             status of terrorist supporting organizations.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 17, 2024

 Mr. Cornyn (for himself and Mr. King) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to terminate the tax-exempt 
             status of terrorist supporting organizations.

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

SECTION 1. TERMINATION OF TAX-EXEMPT STATUS OF TERRORIST SUPPORTING 
              ORGANIZATIONS.

    (a) In General.--Section 501(p) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(8) Application to terrorist supporting organizations.--
                    ``(A) In general.--For purposes of this subsection, 
                in the case of any terrorist supporting organization--
                            ``(i) such organization (and the 
                        designation of such organization under 
                        subparagraph (B)) shall be treated as described 
                        in paragraph (2), and
                            ``(ii) the period of suspension described 
                        in paragraph (3) with respect to such 
                        organization shall be treated as beginning on 
                        the date that the Secretary designates such 
                        organization under subparagraph (B) and ending 
                        on the date that the Secretary rescinds such 
                        designation under subparagraph (D).
                    ``(B) Terrorist supporting organization.--For 
                purposes of this paragraph, the term `terrorist 
                supporting organization' means any organization which 
                is designated by the Secretary as having provided, 
                during the 3-year period ending on the date of such 
                designation, material support or resources (within the 
                meaning of section 2339B of title 18, United States 
                Code) to an organization described in paragraph (2) 
                (determined after the application of this paragraph to 
                such organization) in excess of a de minimis amount.
                    ``(C) Designation procedure.--
                            ``(i) Notice requirement.--Prior to 
                        designating any organization as a terrorist 
                        supporting organization under subparagraph (B), 
                        the Secretary shall mail to the most recent 
                        mailing address provided by such organization 
                        on the organization's annual return or notice 
                        under section 6033 (or subsequent form 
                        indicating a change of address) a written 
                        notice which includes--
                                    ``(I) a statement that the 
                                Secretary will designate such 
                                organization as a terrorist supporting 
                                organization unless the organization 
                                satisfies the requirements of subclause 
                                (I) or (II) of clause (ii),
                                    ``(II) the name of the organization 
                                or organizations with respect to which 
                                the Secretary has determined such 
                                organization provided material support 
                                or sources as described in subparagraph 
                                (B), and
                                    ``(III) a description of such 
                                material support or resources to the 
                                extent consistent with national 
                                security and law enforcement interests.
                            ``(ii) Opportunity to cure.--In the case of 
                        any notice provided to an organization under 
                        clause (i), the Secretary shall, at the close 
                        of the 90-day period beginning on the date that 
                        such notice was sent, designate such 
                        organization as a terrorist supporting 
                        organization under subparagraph (B) if (and 
                        only if) such organization has not (during such 
                        period)--
                                    ``(I) demonstrated to the 
                                satisfaction of the Secretary that such 
                                organization did not provide the 
                                material support or resources referred 
                                to in subparagraph (B), or
                                    ``(II) made reasonable efforts to 
                                have such support or resources returned 
                                to such organization and certified in 
                                writing to the Secretary that such 
                                organization will not provide any 
                                further support or resources to 
                                organizations described in paragraph 
                                (2).
                        A certification under subclause (II) shall not 
                        be treated as valid if the organization making 
                        such certification has provided any other such 
                        certification during the preceding 5 years.
                    ``(D) Rescission.--The Secretary shall rescind a 
                designation under subparagraph (B) if (and only if)--
                            ``(i) the Secretary determines that such 
                        designation was erroneous,
                            ``(ii) after the Secretary receives a 
                        written certification from an organization that 
                        such organization did not receive the notice 
                        described in subparagraph (C)(i)--
                                    ``(I) the Secretary determines that 
                                it is reasonable to believe that such 
                                organization did not receive such 
                                notice, and
                                    ``(II) such organization satisfies 
                                the requirements of subclause (I) or 
                                (II) of subparagraph (C)(ii) 
                                (determined after taking into account 
                                the last sentence thereof), or
                            ``(iii) the Secretary determines, with 
                        respect to all organizations to which the 
                        material support or resources referred to in 
                        subparagraph (B) were provided, the periods of 
                        suspension under paragraph (3) have ended.
                A certification described in the matter preceding 
                subclause (I) of clause (ii) shall not be treated as 
                valid if the organization making such certification has 
                provided any other such certification during the 
                preceding 5 years.
                    ``(E) Administrative review by internal revenue 
                service independent office of appeals.--In the case of 
                the designation of an organization by the Secretary as 
                a terrorist supporting organization under subparagraph 
                (B), a dispute regarding such designation shall be 
                subject to resolution by the Internal Revenue Service 
                Independent Office of Appeals under section 7803(e) in 
                the same manner as if such designation were made by the 
                Internal Revenue Service and paragraph (5) of this 
                subsection did not apply.
                    ``(F) Jurisdiction of united states courts.--
                Notwithstanding paragraph (5), the United States 
                district courts shall have exclusive jurisdiction to 
                review a final determination with respect to an 
                organization's designation as a terrorist supporting 
                organization under subparagraph (B). In the case of any 
                such determination which was based on classified 
                information (as defined in section 1(a) of the 
                Classified Information Procedures Act), such 
                information may be submitted to the reviewing court ex 
                parte and in camera. For purposes of this subparagraph, 
                a determination with respect to an organization's 
                designation as a terrorist supporting organization 
                shall not fail to be treated as a final determination 
                merely because such organization fails to utilize the 
                dispute resolution process of the Internal Revenue 
                Service Independent Office of Appeals provided under 
                subparagraph (E).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to designations made after the date of the enactment of this Act in 
taxable years ending after such date.
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