118th CONGRESS 2d Session |
To amend the Internal Revenue Code of 1986 to postpone tax deadlines and reimburse paid late fees for United States nationals who are unlawfully or wrongfully detained or held hostage abroad, to terminate the tax-exempt status of terrorist supporting organizations, and for other purposes.
September 9, 2024
Ms. Tenney (for herself, Mr. Kustoff, Mr. Schneider, and Ms. Titus) introduced the following bill; which was referred to the Committee on Ways and Means
To amend the Internal Revenue Code of 1986 to postpone tax deadlines and reimburse paid late fees for United States nationals who are unlawfully or wrongfully detained or held hostage abroad, to terminate the tax-exempt status of terrorist supporting organizations, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
This Act may be cited as the “Stop Terror-Financing and Tax Penalties on American Hostages Act”.
SEC. 2. Postponement of tax deadlines for hostages and individuals wrongfully detained abroad.
(a) In general.—Chapter 77 of the Internal Revenue Code of 1986 is amended by inserting after section 7510 the following new section:
“SEC. 7511. Time for performing certain acts postponed for hostages and individuals wrongfully detained abroad.
“(1) IN GENERAL.—The period during which an applicable individual was unlawfully or wrongfully detained abroad, or held hostage abroad, shall be disregarded in determining, under the internal revenue laws, in respect of any tax liability of such individual—
“(A) whether any of the acts described in section 7508(a)(1) were performed within the time prescribed thereof (determined without regard to extension under any other provision of this subtitle for periods after the initial date (as determined by the Secretary) on which such individual was unlawfully or wrongfully detained abroad or held hostage abroad),
“(B) the amount of any interest, penalty, additional amount, or addition to the tax for periods after such date, and
“(C) the amount of any credit or refund.
“(2) APPLICATION TO SPOUSE.—The provisions of paragraph (1) shall apply to the spouse of any individual entitled to the benefits of such paragraph.
“(1) IN GENERAL.—For purposes of this section, the term ‘applicable individual’ means any individual who is—
“(A) a United States national unlawfully or wrongfully detained abroad, as determined under section 302 of the Robert Levinson Hostage Recovery and Hostage-Taking Accountability Act (22 U.S.C. 1741), or
“(B) a United States national taken hostage abroad, as determined pursuant to the findings of the Hostage Recovery Fusion Cell (as described in section 304 of the Robert Levinson Hostage Recovery and Hostage-Taking Accountability Act (22 U.S.C. 1741b)).
“(2) INFORMATION PROVIDED TO TREASURY.—For purposes of identifying individuals described in paragraph (1), not later than January 1, 2025, and annually thereafter—
“(A) the Secretary of State shall provide the Secretary with a list of the individuals described in paragraph (1)(A), as well as any other information necessary to identify such individuals, and
“(B) the Attorney General, acting through the Hostage Recovery Fusion Cell, shall provide the Secretary with a list of the individuals described in paragraph (1)(B), as well as any other information necessary to identify such individuals.
“(c) Modification of Treasury databases and information systems.—The Secretary shall ensure that databases and information systems of the Department of the Treasury are updated as necessary to ensure that statute expiration dates, interest and penalty accrual, and collection activities are suspended consistent with the application of subsection (a).
“(d) Refund and abatement of penalties and fines imposed prior to identification as applicable individual.—In the case of any applicable individual—
“(1) for whom any interest, penalty, additional amount, or addition to the tax in respect to any tax liability for any taxable year ending during the period described in subsection (a)(1) was assessed or collected, and
“(2) who was, subsequent to such assessment or collection, determined to be an individual described in subparagraph (A) or (B) of subsection (b)(1),
the Secretary shall abate any such assessment and refund any amount collected to such applicable individual in the same manner as any refund of an overpayment of tax under section 6402.”.
(b) Clerical amendment.—The table of sections for chapter 77 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 7510 the following new item:
“Sec. 7511. Time for performing certain acts postponed for hostages and individuals wrongfully detained abroad.”.
(c) Effective date.—The amendments made by this section shall apply to taxable years ending after the date of enactment of this Act.
SEC. 3. Refund and abatement of penalties and fines paid by eligible individuals.
(a) In general.—Section 7511 of the Internal Revenue Code of 1986, as added by section 2, is amended by adding at the end the following new subsection:
“(e) Refund and abatement of penalties and fines paid by eligible individuals with respect to periods prior to date of enactment of this section.—
“(A) ESTABLISHMENT.—Not later than January 1, 2025, the Secretary (in consultation with the Secretary of State and the Attorney General) shall establish a program to allow any eligible individual (or the spouse or any dependent (as defined in section 152) of such individual) to apply for a refund or an abatement of any amount described in paragraph (2) (including interest) to the extent such amount was attributable to the applicable period.
“(B) IDENTIFICATION OF INDIVIDUALS.—Not later than January 1, 2025, the Secretary of State and the Attorney General, acting through the Hostage Recovery Fusion Cell (as described in section 304 of the Robert Levinson Hostage Recovery and Hostage-Taking Accountability Act (22 U.S.C. 1741b)), shall—
“(i) compile a list, based on such information as is available, of individuals who were applicable individuals during the applicable period, and
“(ii) provide the list described in clause (i) to the Secretary.
“(C) NOTICE.—For purposes of carrying out the program described in subparagraph (A), the Secretary (in consultation with the Secretary of State and the Attorney General) shall, with respect to any individual identified under subparagraph (B), provide notice to such individual—
“(i) in the case of an individual who has been released on or before the date of enactment of this subsection, not later than 90 days after the date of enactment of this subsection, or
“(ii) in the case of an individual who is released after the date of enactment of this subsection, not later than 90 days after the date on which such individual is released,
that such individual may be eligible for a refund or an abatement of any amount described in paragraph (2) pursuant to the program described in subparagraph (A).
“(i) IN GENERAL.—Subject to clause (ii), in the case of any refund described in subparagraph (A), the Secretary shall issue such refund to the eligible individual in the same manner as any refund of an overpayment of tax.
“(ii) EXTENSION OF LIMITATION ON TIME FOR REFUND.—With respect to any refund under subparagraph (A)—
“(I) the 3-year period of limitation prescribed by section 6511(a) shall be extended until the end of the 1-year period beginning on the date that the notice described in subparagraph (C) is provided to the eligible individual, and
“(II) any limitation under section 6511(b)(2) shall not apply.
“(2) ELIGIBLE INDIVIDUAL.—For purposes of this subsection, the term ‘eligible individual’ means any applicable individual who, for any taxable year ending during the applicable period, paid or incurred any interest, penalty, additional amount, or addition to the tax in respect to any tax liability for such year of such individual based on a determination that an act described in section 7508(a)(1) which was not performed by the time prescribed therefor (without regard to any extensions).
“(3) APPLICABLE PERIOD.—For purposes of this subsection, the term ‘applicable period’ means the period—
“(A) beginning on January 1, 2021, and
“(B) ending on the date of enactment of this subsection.”.
(b) Effective date.—The amendment made by this section shall apply to taxable years ending on or before the date of enactment of this Act.
SEC. 4. Termination of tax-exempt status of terrorist supporting organizations.
(a) In general.—Section 501(p) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(8) APPLICATION TO TERRORIST SUPPORTING ORGANIZATIONS.—
“(A) IN GENERAL.—For purposes of this subsection, in the case of any terrorist supporting organization—
“(i) such organization (and the designation of such organization under subparagraph (B)) shall be treated as described in paragraph (2), and
“(ii) the period of suspension described in paragraph (3) with respect to such organization shall be treated as beginning on the date that the Secretary designates such organization under subparagraph (B) and ending on the date that the Secretary rescinds such designation under subparagraph (D).
“(B) TERRORIST SUPPORTING ORGANIZATION.—For purposes of this paragraph, the term ‘terrorist supporting organization’ means any organization which is designated by the Secretary as having provided, during the 3-year period ending on the date of such designation, material support or resources (within the meaning of section 2339B of title 18, United States Code) to an organization described in paragraph (2) (determined after the application of this paragraph to such organization) in excess of a de minimis amount.
“(i) NOTICE REQUIREMENT.—Prior to designating any organization as a terrorist supporting organization under subparagraph (B), the Secretary shall mail to the most recent mailing address provided by such organization on the organization’s annual return or notice under section 6033 (or subsequent form indicating a change of address) a written notice which includes—
“(I) a statement that the Secretary will designate such organization as a terrorist supporting organization unless the organization satisfies the requirements of subclause (I) or (II) of clause (ii),
“(II) the name of the organization or organizations with respect to which the Secretary has determined such organization provided material support or sources as described in subparagraph (B), and
“(III) a description of such material support or resources to the extent consistent with national security and law enforcement interests.
“(ii) OPPORTUNITY TO CURE.—In the case of any notice provided to an organization under clause (i), the Secretary shall, at the close of the 90-day period beginning on the date that such notice was sent, designate such organization as a terrorist supporting organization under subparagraph (B) if (and only if) such organization has not (during such period)—
“(I) demonstrated to the satisfaction of the Secretary that such organization did not provide the material support or resources referred to in subparagraph (B), or
“(II) made reasonable efforts to have such support or resources returned to such organization and certified in writing to the Secretary that such organization will not provide any further support or resources to organizations described in paragraph (2).
A certification under subclause (II) shall not be treated as valid if the organization making such certification has provided any other such certification during the preceding 5 years.
“(D) RESCISSION.—The Secretary shall rescind a designation under subparagraph (B) if (and only if)—
“(i) the Secretary determines that such designation was erroneous,
“(ii) after the Secretary receives a written certification from an organization that such organization did not receive the notice described in subparagraph (C)(i)—
“(I) the Secretary determines that it is reasonable to believe that such organization did not receive such notice, and
“(II) such organization satisfies the requirements of subclause (I) or (II) of subparagraph (C)(ii) (determined after taking into account the last sentence thereof), or
“(iii) the Secretary determines, with respect to all organizations to which the material support or resources referred to in subparagraph (B) were provided, the periods of suspension under paragraph (3) have ended.
A certification described in the matter preceding subclause (I) of clause (II) shall not be treated as valid if the organization making such certification has provided any other such certification during the preceding 5 years.
“(E) ADMINISTRATIVE REVIEW BY INTERNAL REVENUE SERVICE INDEPENDENT OFFICE OF APPEALS.—In the case of the designation of an organization by the Secretary as a terrorist supporting organization under subparagraph (B), a dispute regarding such designation shall be subject to resolution by the Internal Revenue Service Independent Office of Appeals under section 7803(e) in the same manner as if such designation were made by the Internal Revenue Service and paragraph (5) of this subsection did not apply.
“(F) JURISDICTION OF UNITED STATES COURTS.—Notwithstanding paragraph (5), the United States district courts shall have exclusive jurisdiction to review a final determination with respect to an organization’s designation as a terrorist supporting organization under subparagraph (B). In the case of any such determination which was based on classified information (as defined in section 1(a) of the Classified Information Procedures Act), such information may be submitted to the reviewing court ex parte and in camera. For purposes of this subparagraph, a determination with respect to an organization’s designation as a terrorist supporting organization shall not fail to be treated as a final determination merely because such organization fails to utilize the dispute resolution process of the Internal Revenue Service Independent Office of Appeals provided under subparagraph (E).”.
(b) Effective date.—The amendment made by this subsection shall apply to designations made after the date of the enactment of this Act in taxable years ending after such date.