HB2265, titled the No Foreign Election Interference Act, would amend the Internal Revenue Code to penalize certain tax-exempt organizations that make contributions to political committees after receiving contributions or gifts from foreign nationals. The bill creates a new penalty equal to twice the amount of any “disqualified political committee contribution” made by a covered tax-exempt organization. A contribution is disqualified if the organization, during an eight-year lookback period, received any contribution or gift from a foreign national.
The bill applies only to “specified tax exempt organizations,” generally section 501(c) organizations that are tax-exempt under section 501(a) and meet a size threshold of at least $200,000 in gross receipts or $500,000 in assets. It also includes a coordination rule for organizations already subject to revocation rules, treating them as covered for the first three disqualified contributions. If an organization makes more than two such disqualified political committee contributions, it loses tax-exempt status for taxable years ending on or after the date of the third contribution. The effective date is for contributions made on or after January 1, 2026.
Impact
The bill would add a new penalty provision to chapter 68 of the Internal Revenue Code and amend section 501 to create a tax-exemption revocation trigger tied to political spending by certain nonprofits that have received foreign-national funds. It would affect larger tax-exempt organizations, especially those engaged in political activity through contributions to political committees, by exposing them to a 200 percent excise penalty and, after repeated violations, loss of tax-exempt status. The measure would also require the IRS to administer and enforce the new penalty and revocation framework beginning with 2026 contributions.
Sentiment
Based on the bill title and text, the measure appears to be framed as an election-integrity and anti-foreign-interference proposal, suggesting supportive sentiment among sponsors and likely proponents concerned about foreign influence in U.S. politics. No committee transcript or vote record is available, so there is no documented debate or recorded opposition in the provided materials. The bill was introduced and referred to the House Committee on Ways and Means, with no further action shown.
Contention
The main policy tension is between preventing foreign influence in political activity and the potential burden on tax-exempt organizations that may receive foreign-national donations for nonpolitical purposes. Critics could argue that the bill sweeps broadly by using an eight-year lookback and applying penalties based on any foreign-national contribution or gift, not just funds tied to political spending. Another possible point of contention is the revocation of tax-exempt status after a third violation, which could be viewed as a strong sanction for organizations that may have limited or indirect connections to foreign donors. No specific objections or supporters are identified in the provided record.
Campaign finance: contributions and expenditures; acceptance of certain contributions by judge or justice; prohibit. Amends 1976 PA 388 (MCL 169.201 - 169.282) by adding sec. 30a.
Senate Substitute for HB 2054 by Committee on Federal and State Affairs - Increasing the limits on certain campaign contributions under the campaign finance act.