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Chairman Smith: Kustoff, Schneider Legislation to Revoke Tax-Exempt Status of Non-Profits Supporting Hamas Crucial to Stopping Financial Flows to Terror Groups

November 16, 2023

WASHINGTON, D.C. — After Congressman David Kustoff (TN-08) and Congressman Brad Schneider (IL-10) introduced bipartisan legislation to revoke the tax-exempt status for any organization that provides financial support or resources to designated terrorist groups, Ways and Means Chairman Jason Smith (MO-08) issued the following statement: 

“Some organizations that have celebrated the unspeakable acts of terror that claimed the lives of 30 Americans and over 1,200 Israeli men, women, and children currently enjoy tax-exempt status in the United States. Their statements call into question the charitable missions they claim to pursue while enjoying lucrative federal tax-exempt status. Congress and the American people will not stand for allowing their tax dollars to go toward support of Hamas terrorists and violence against the people of Israel. This crucial bipartisan legislation is an important step in going after the financial networks on which terror organizations rely.”

Recent reports have indicated that U.S. based, tax-exempt nonprofits may be providing funding and support to Hamas. 

“A crucial pillar in the global fight against terrorism is dismantling the financial networks of terrorist organizations, including Hamas,” said Congressman Kustoff. “Under no circumstances should organizations supporting terrorism be allowed to receive preferential treatment under the U.S. tax code. I urge the swift passage of this legislation that will significantly diminish the ability of Hamas and other terrorist groups to finance their operations and carry out future attacks.”

“In the weeks following Hamas’s barbaric massacre of Israelis on October 7th, America has witnessed a dramatic increase in incidents of hateful speech, threats of violence and, shockingly, support for the Hamas terrorists. American taxpayer funds should never be used to support terrorist groups like Hamas, Hezbollah or ISIS.  That’s why I am proud to introduce this bipartisan legislation to prevent American taxpayers from directly or indirectly assisting any groups that support or advance the interests of terrorists,” said Congressman Schneider.

Click here to read the full text of the bill.

The Ways and Means Committee has been examining the nexus between nonprofits and terror financing. Equally important, the Committee will look into tax advantaged universities employing a double standard on speech in a Wednesday hearing.