HR-9254-119
Referred to the House Committee on Ways and Means.
Sponsored by Chip Roy (R-TX)
What it does
This bill would remove the Southern Poverty Law Center (SPLC) from eligibility for 501(c)(3) tax-exempt status under the Internal Revenue Code, effective for tax years ending after the bill's enactment. This would mean the SPLC could no longer receive tax-deductible donations, would be subject to federal corporate income tax on its revenues, and would lose other benefits associated with charitable status. The bill targets a single named organization by statute, bypassing the IRS administrative process that normally governs tax-exempt status determinations.
Who benefits
Organizations and individuals who view the SPLC's "hate group" designations as politically motivated and harmful to their reputations. Conservative advocacy groups, religious organizations, and others who have been listed on SPLC's watchlists and argue those designations have caused reputational or financial harm. Competing civil rights organizations that would no longer face a tax-advantaged rival. Taxpayers who believe federal tax subsidies should not support the SPLC's activities.
Who is hurt
The SPLC itself, which would lose tax-exempt status and face federal income taxation on its revenues. Current and future donors to the SPLC who would lose the ability to deduct contributions from their federal taxes. SPLC employees whose jobs could be affected if the organization's funding declines. Beneficiaries of SPLC legal and educational programs, including victims of hate crimes and civil rights violations the SPLC represents. Broader nonprofit sector, which could face a precedent of Congress revoking tax-exempt status of specific named organizations for policy or political reasons.
Supporters argue
Supporters argue that the SPLC functions as a partisan political advocacy organization rather than a genuine charity, and that its 501(c)(3) status amounts to a federal subsidy for political activity. They contend the SPLC's "hate group" designations have been used to target mainstream conservative and religious organizations — a practice that has led to real-world consequences, including a 2012 shooting at the Family Research Council by a gunman who cited the SPLC's designation list. They argue Congress has both the authority and the responsibility to ensure that tax-exempt status is not extended to organizations that operate outside the charitable mission the law intends to protect.
Opponents argue
Opponents argue that revoking the tax-exempt status of a single named organization by statute — rather than through the IRS's established administrative process — sets a dangerous precedent that could be used by any future Congress to punish any nonprofit whose speech or advocacy it disfavors. They contend the bill raises serious First Amendment concerns, as it uses the tax code to penalize a specific organization for its expressive activities, and may constitute an unconstitutional bill of attainder — a legislative act that singles out a specific entity for punishment without a judicial trial. They further argue the IRS already has authority to revoke status for organizations that violate the law, making this legislative intervention unnecessary.
Constitutional context
The Taxing and Spending Clause (Art. I, §8, cl. 1) gives Congress broad authority to define which organizations qualify for tax-exempt status. However, singling out one named organization by statute raises potential Bill of Attainder concerns (Art. I, §9, cl. 3), which prohibits Congress from legislatively punishing a specific person or entity without a judicial trial. The First Amendment's prohibition on viewpoint-based government action may also be implicated if the revocation is found to target the organization's expressive activities.
Checks and balances
Congress would gain direct authority to strip a specific organization's tax-exempt status, bypassing the IRS administrative process; the primary check would be judicial review, where courts could assess Bill of Attainder and First Amendment challenges.
Historical precedent
Congress has not previously enacted legislation revoking the 501(c)(3) status of a single named organization by statute; the IRS administrative revocation process has historically been the mechanism used, most notably in the Bob Jones University v. United States (1983) case where the IRS revoked tax-exempt status over racially discriminatory policies.