Cape News

The U.S. House of Representatives has passed the bipartisan Ways and Means legislation, overcoming initial resistance from House Democrats. This new bill, known as the Stop Terror-Financing and Tax Penalties on American Hostages Act (H.R. 9495), aims to enhance national security by revoking tax-exempt status from organizations found supporting terrorist groups and offering fair tax treatment for Americans wrongfully detained or held hostage abroad.

Chairman Jason Smith of the Ways and Means Committee criticized the Democratic opposition during a floor debate, stating: “This piece of legislation received unanimous approval by the Ways and Means Committee and contains provisions that already passed this House with overwhelming bipartisan support and received unanimous consent in the U.S. Senate." He further emphasized, "Congress must act to stop this abuse of our tax code that is funding terrorism around the world."

The legislation represents ongoing efforts by the Ways and Means Committee to address concerns over tax-exempt organizations with ties to terrorism. In September, Chairman Smith urged the IRS to revoke tax-exempt statuses from several organizations linked to foreign terrorist entities. Recently, he called for similar action against Alliance for Global Justice due to its financial connections with Samidoun, a group associated with terrorism.

H.R. 9495 seeks not only to eliminate these tax exemptions but also to protect Americans who have faced captivity abroad from penalties related to overdue taxes during their detention period. According to data from the James W. Foley Foundation, 46 Americans were held hostage across 16 countries in 2024.

In previous committee votes, H.R. 9495 secured unanimous support at 38-0 in favor, while related legislation H.R. 6408 achieved a vote of 41-0 in committee and later passed in the House by a margin of 382-11.

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