HR-9772-119
Placed on the Union Calendar, Calendar No. 666.
Sponsored by David Schweikert (R-AZ)
What it does
This bill would require tax-exempt organizations under section 501(c) with gross receipts of $200,000 or more, or assets of $500,000 or more, to annually report to the IRS the total contributions received from foreign nationals, broken out separately by any "foreign country of concern." Organizations could rely on a donor's own statement of nationality unless they know or should know it is false. The IRS could issue rules requiring organizations to collect this nationality information from foreign donors.
Who benefits
Federal agencies and lawmakers seeking visibility into foreign funding of U.S. nonprofits, including national security and counterintelligence officials monitoring influence from countries of concern; watchdog groups and researchers tracking foreign funding of advocacy organizations; possibly domestic-funded nonprofits competing for the same donor base or public trust.
Who is hurt
Mid-size and large 501(c) organizations (charities, advocacy groups, think tanks, trade associations, foundations) that receive foreign contributions would face new compliance and recordkeeping costs; foreign donors and diaspora communities who may be discouraged from giving due to disclosure requirements; smaller nonprofits near the $200,000/$500,000 threshold that must now track and verify donor nationality.
Supporters argue
Supporters argue that foreign governments and foreign nationals have used tax-exempt organizations to influence U.S. policy debates without public awareness, and that transparency about foreign funding sources helps Congress, regulators, and the public assess potential foreign influence, especially from countries of concern. They contend the bill is narrowly tailored, applying only to larger organizations and relying on existing donor representations rather than imposing burdensome verification.
Opponents argue
Opponents argue that mandatory disclosure of foreign contributions could chill legitimate international charitable giving, academic exchange, and advocacy work, and may expose donors to reputational or safety risks if their identities or countries become linked to controversial causes. They contend the reporting burden falls on organizations of many kinds, not just those with plausible foreign-influence concerns, and could be used to selectively target disfavored nonprofits based on their funding sources or advocacy positions.
Constitutional context
Congress has broad authority to impose recordkeeping and reporting conditions on tax-exempt status under the Taxing and Spending Clause (Art. I, §8, cl. 1), but such disclosure mandates can implicate First Amendment associational privacy rights, as in NAACP v. Alabama (1958) and more recently Americans for Prosperity Foundation v. Bonta (2021), which required exacting scrutiny for compelled donor disclosure regimes.
Checks and balances
Congress would set the disclosure mandate through the tax code, the IRS (executive branch) would implement and enforce reporting and issue related regulations, and courts could review the requirement for compliance with First Amendment associational rights.
Historical precedent
Federal election law has long required disclosure of foreign national political contributions, and some states have enacted donor disclosure laws for nonprofits that were partially struck down in Americans for Prosperity Foundation v. Bonta (2021), though this bill targets foreign funding specifically rather than general donor disclosure.