IB 

Union Calendar No. 270 

118TH CONGRESS 

1ST SESSION H. R. 6408 

[Report No. 118–331] 

To amend the Internal Revenue Code of 1986 to terminate the tax-exempt 

status of terrorist supporting organizations. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 14, 2023 

Mr. KUSTOFF (for himself and Mr. SCHNEIDER) introduced the following bill; 

which was referred to the Committee on Ways and Means 

DECEMBER 19, 2023 

Additional sponsors: Ms. TENNEY, Mr. FERGUSON, Mr. TORRES of New York, 

Mr. KELLY of Pennsylvania, Mr. DIAZ-BALART, and Mr. GOTTHEIMER

DECEMBER 19, 2023 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on November 14, 2023] 

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A BILL 

To amend the Internal Revenue Code of 1986 to terminate 

the tax-exempt status of terrorist supporting organizations. 

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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. TERMINATION OF TAX-EXEMPT STATUS OF TER4 RORIST SUPPORTING ORGANIZATIONS. 

5 (a) IN GENERAL.—Section 501(p) of the Internal Rev6 enue Code of 1986 is amended by adding at the end the 

7 following new paragraph: 

8 ‘‘(8) APPLICATION TO TERRORIST SUPPORTING

9 ORGANIZATIONS.— 

10 ‘‘(A) IN GENERAL.—For purposes of this 

11 subsection, in the case of any terrorist sup12 porting organization— 

13 ‘‘(i) such organization (and the des14 ignation of such organization under sub15 paragraph (B)) shall be treated as described 

16 in paragraph (2), and 

17 ‘‘(ii) the period of suspension described 

18 in paragraph (3) with respect to such orga19 nization shall be treated as beginning on the 

20 date that the Secretary designates such or21 ganization under subparagraph (B) and 

22 ending on the date that the Secretary re23 scinds such designation under subparagraph 

24 (D). 

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1 ‘‘(B) TERRORIST SUPPORTING ORGANIZA2 TION.—For purposes of this paragraph, the term 

3 ‘terrorist supporting organization’ means any 

4 organization which is designated by the Sec5 retary as having provided, during the 3-year pe6 riod ending on the date of such designation, ma7 terial support or resources (within the meaning 

8 of section 2339B of title 18, United States Code) 

9 to an organization described in paragraph (2) 

10 (determined after the application of this para11 graph to such organization) in excess of a de 

12 minimis amount. 

13 ‘‘(C) DESIGNATION PROCEDURE.— 

14 ‘‘(i) NOTICE REQUIREMENT.—Prior to 

15 designating any organization as a terrorist 

16 supporting organization under subpara17 graph (B), the Secretary shall mail to the 

18 most recent mailing address provided by 

19 such organization on the organization’s an20 nual return or notice under section 6033 (or 

21 subsequent form indicating a change of ad22 dress) a written notice which includes— 

23 ‘‘(I) a statement that the Sec24 retary will designate such organization 

25 as a terrorist supporting organization 

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1 unless the organization satisfies the re2 quirements of subclause (I) or (II) of 

3 clause (ii), 

4 ‘‘(II) the name of the organization 

5 or organizations with respect to which 

6 the Secretary has determined such or7 ganization provided material support 

8 or sources as described in subpara9 graph (B), and 

10 ‘‘(III) a description of such mate11 rial support or resources to the extent 

12 consistent with national security and 

13 law enforcement interests. 

14 ‘‘(ii) OPPORTUNITY TO CURE.—In the 

15 case of any notice provided to an organiza16 tion under clause (i), the Secretary shall, at 

17 the close of the 90-day period beginning on 

18 the date that such notice was sent, designate 

19 such organization as a terrorist supporting 

20 organization under subparagraph (B) if 

21 (and only if) such organization has not 

22 (during such period)— 

23 ‘‘(I) demonstrated to the satisfac24 tion of the Secretary that such organi25 zation did not provide the material 

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1 support or resources referred to in sub2 paragraph (B), or 

3 ‘‘(II) made reasonable efforts to 

4 have such support or resources re5 turned to such organization and cer6 tified in writing to the Secretary that 

7 such organization will not provide any 

8 further support or resources to organi9 zations described in paragraph (2). 

10 A certification under subclause (II) shall 

11 not be treated as valid if the organization 

12 making such certification has provided any 

13 other such certification during the preceding 

14 5 years. 

15 ‘‘(D) RESCISSION.—The Secretary shall re16 scind a designation under subparagraph (B) if 

17 (and only if)— 

18 ‘‘(i) the Secretary determines that such 

19 designation was erroneous, 

20 ‘‘(ii) after the Secretary receives a 

21 written certification from an organization 

22 that such organization did not receive the 

23 notice described in subparagraph (C)(i)— 

24 ‘‘(I) the Secretary determines that 

25 it is reasonable to believe that such orVerDate Sep 11 2014 00:27 Dec 20, 2023 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H6408.RH H6408
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1 ganization did not receive such notice, 

2 and 

3 ‘‘(II) such organization satisfies 

4 the requirements of subclause (I) or 

5 (II) of subparagraph (C)(ii) (deter6 mined after taking into account the 

7 last sentence thereof), or 

8 ‘‘(iii) the Secretary determines, with 

9 respect to all organizations to which the 

10 material support or resources referred to in 

11 subparagraph (B) were provided, the peri12 ods of suspension under paragraph (3) have 

13 ended. 

14 A certification described in the matter preceding 

15 subclause (I) of clause (II) shall not be treated 

16 as valid if the organization making such certifi17 cation has provided any other such certification 

18 during the preceding 5 years. 

19 ‘‘(E) ADMINISTRATIVE REVIEW BY INTER20 NAL REVENUE SERVICE INDEPENDENT OFFICE OF

21 APPEALS.—In the case of the designation of an 

22 organization by the Secretary as a terrorist sup23 porting organization under subparagraph (B), a 

24 dispute regarding such designation shall be sub25 ject to resolution by the Internal Revenue Service 

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1 Independent Office of Appeals under section 

2 7803(e) in the same manner as if such designa3 tion were made by the Internal Revenue Service 

4 and paragraph (5) of this subsection did not 

5 apply. 

6 ‘‘(F) JURISDICTION OF UNITED STATES

7 COURTS.—Notwithstanding paragraph (5), the 

8 United States district courts shall have exclusive 

9 jurisdiction to review a final determination with 

10 respect to an organization’s designation as a ter11 rorist supporting organization under subpara12 graph (B). In the case of any such determination 

13 which was based on classified information (as 

14 defined in section 1(a) of the Classified Informa15 tion Procedures Act), such information may be 

16 submitted to the reviewing court ex parte and in 

17 camera. For purposes of this subparagraph, a 

18 determination with respect to an organization’s 

19 designation as a terrorist supporting organiza20 tion shall not fail to be treated as a final deter21 mination merely because such organization fails 

22 to utilize the dispute resolution process of the In23 ternal Revenue Service Independent Office of Ap24 peals provided under subparagraph (E).’’. 

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1 (b) EFFECTIVE DATE.—The amendment made by this 

2 section shall apply to designations made after the date of 

3 the enactment of this Act in taxable years ending after such 

4 date. 

Union Calendar No. 270 

118TH CONGRESS 

1ST SESSION H. R. 6408 

[Report No. 118–331] 

A BILL 

To amend the Internal Revenue Code of 1986 to 

porting organizations. terminate the tax-exempt status of terrorist supDECEMBER 19, 2023 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union,