No Foreign Election Interference Act

Bill Number

H.R. 2265

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-03-21: Referred to the House Committee on Ways and Means.

Last Updated

2026-02-04T05:06:16Z

AI-Generated Summary

No Foreign Election Interference Act (H.R. 2265)

Purpose

The legislation aims to prevent foreign nationals from indirectly influencing U.S. elections by restricting tax-exempt organizations that receive foreign contributions from donating to political committees. It imposes financial penalties and potential loss of tax-exempt status to deter such activities.

Key Provisions

• Penalties for Disqualified Contributions: Adds a new section (6720D) to the Internal Revenue Code (IRC), requiring "specified tax-exempt organizations" to pay a penalty equal to twice the amount of any "disqualified political committee contribution."
• A disqualified contribution occurs when a tax-exempt organization under section 501(c) donates to a political committee (as defined by federal election law) if it has received any contribution or gift from a foreign national during an 8-year "testing period" ending on the donation date.
• The testing period excludes time before the law's enactment.
• Definition of Specified Organizations: Applies to 501(c) organizations with either $200,000 or more in gross receipts or $500,000 or more in assets in a taxable year. Organizations that lose tax-exempt status solely due to this law are still treated as exempt for the first three violations when calculating penalties.
• Revocation of Tax-Exempt Status: Adds a new subsection (501(s)) to the IRC, revoking tax-exempt status for any 501(c) organization after it makes a third disqualified contribution. This revocation applies to taxable years ending on or after the third violation.
• Effective Date: Applies to contributions made on or after January 1, 2026.

Significant Changes to Existing Law

• Introduces new penalties and revocation rules in the IRC, which previously did not specifically address foreign-sourced funds flowing through tax-exempt organizations to political committees.
• Builds on existing federal election laws (e.g., bans on direct foreign national contributions under 52 U.S.C. 30121) by extending restrictions to indirect channels via tax-exempt entities.
• Adds a clerical update to the IRC's table of sections for the new penalty provision.

Potential Impacts

• On Government Agencies: The Internal Revenue Service (IRS) will need to enforce penalties and revocations, potentially increasing administrative workload for auditing tax-exempt organizations and tracking foreign contributions.
• On Citizens and Organizations: Tax-exempt groups (e.g., nonprofits or advocacy organizations) that rely on diverse funding sources may face financial risks, discouraging acceptance of foreign donations to avoid penalties or status loss. This could limit their political engagement.
• On International Relations: May signal stronger U.S. commitment to protecting election integrity from foreign interference, potentially straining relations with countries whose nationals contribute to U.S. organizations, though it targets indirect influence rather than direct diplomacy.
• Broader effect: Could reduce undisclosed foreign money in elections, enhancing transparency but possibly constraining free speech for affected groups.

Main Stakeholders Affected

• Tax-Exempt Organizations: Primarily 501(c) entities meeting size thresholds, such as charities, trade associations, or social welfare groups that engage in political activities.
• Political Committees: Recipients of donations (e.g., political action committees or party committees), which may receive fewer funds from tainted sources.
• Foreign Nationals: Individuals or entities barred from contributing directly to U.S. elections, now indirectly restricted through tax-exempt intermediaries.
• U.S. Taxpayers and Voters: Indirectly benefited through safeguards against foreign election influence, but potentially affected if organizations pass on compliance costs.
• IRS and Election Regulators: Responsible for enforcement, including the Federal Election Commission (FEC) for defining political committees.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens enforcement of foreign contribution bans by closing a perceived loophole in tax law, but requires coordination between IRS (tax enforcement) and FEC (election rules), potentially leading to new regulatory guidance or litigation over definitions like "foreign national" or "gift."
• Constitutional: Could raise First Amendment concerns regarding free speech and association for tax-exempt organizations, as restrictions on political donations might be challenged in court; however, the law focuses on foreign influence, aligning with precedents upholding limits on non-citizen election involvement.
• Political: Promotes bipartisan interest in election security but may spark debate over nonprofit autonomy and foreign funding transparency, influencing future campaign finance reforms without altering core tax-exempt rules for domestic activities.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Malliotakis, Nicole [R-NY-11]

Recent Actions

• 2025-03-21: Referred to the House Committee on Ways and Means.
• 2025-03-21: Introduced in House
• 2025-03-21: Introduced in House

Bill Versions

• No Foreign Election Interference Act — issued 2025-03-21 — PDF (5 pages)