“To amend the Internal Revenue Code of 1986 to provide that 501(c)(3) organizations are liable for the use of funding provided as a fiscal sponsor.”
No CRS summary available for this bill.
This section amends Section 501 of the Internal Revenue Code of 1986 by adding a new subsection (s) to impose criminal liability on tax-exempt organizations described in subsection (c)(3) for any fiscal sponsorship (i.e., receiving and administering funds with discretion and control for a non-tax-exempt project or organization) and civil liability for covered activities related to such sponsorship if a deduction under Section 170 is allowed or represented for donor contributions to it. Covered activities include (1) aiding, abetting, or conspiring in an act of international terrorism by a foreign terrorist organization designated under Section 219 of the Immigration and Nationality Act (8 U.S.C. 1189) through substantial assistance; (2) using force, credible threat of force, or physical obstruction to injure, intimidate, or interfere with a person exercising constitutional rights; or (3) using force, credible threat of force, or physical blocking to prevent interstate or intrastate commerce. The provision presumes such organizations are responsible for legal compliance in fund use and permits defenses based on due diligence and reasonable oversight.