Cape News

The House Democrats have blocked the passage of the Stop Terror-Financing and Tax Penalties on American Hostages Act (H.R. 9495), despite its strong bipartisan support. The bill, which had previously passed the U.S. House of Representatives with a vote of 382-11 and was unanimously approved by the Ways and Means Committee, aimed to end tax subsidies for U.S. nonprofits that materially support terrorist organizations. It also sought to provide fair tax treatment for Americans held hostage or wrongfully detained abroad by preventing the IRS from charging penalties or assessing interest on their past-due taxes.

During the debate, House Democrats cited President Trump's election as a reason for opposing legislation they had previously supported. One member stated, “With Trump’s election, the conditions have changed.”

Ways and Means Committee Chairman Jason Smith expressed disappointment at the opposition: “Before he even takes the oath of office, Democrats are wasting no time using President Trump as an excuse to oppose common sense, bipartisan solutions.” He emphasized that this move hinders efforts to prevent abuse of America's tax code by terrorist organizations and further punishes Americans who were unable to pay taxes while in captivity.

The Ways and Means Committee has been investigating nonprofits suspected of ties to terrorism while maintaining their tax-exempt status. Hearings revealed activities by groups like Alliance for Global Justice (AGJ), which was found funding a group designated as a sham charity and funder of terrorism. Despite these findings, AGJ's tax-exempt status remains intact.

While Democrats refuse to advance this legislation, many Americans continue facing wrongful detention worldwide. Even after release, they often face unpaid tax bills with penalties accrued during captivity.

H.R. 9495 proposed terminating tax-exempt status for organizations supporting terrorist groups such as Hamas and provided fair treatment for hostages regarding past-due taxes.

The bill passed unanimously in committee hearings but faced blockage due to political opposition following Trump's election.