During the February 10 House Ways and Means Committee hearing on "Foreign Influence in American Non-profits: Unmasking Threats from Beijing and Beyond," Republicans focused on how to prevent foreign groups from interfering in US politics. Democrats, while acknowledging concerns about such foreign interference, largely steered their attention to foreign contributions related to the President. There was bipartisan interest in, and witness recommendations for, redesigning the Form 990 filed by tax-exempt organizations, nonexempt charitable trusts, and certain political organizations.

Foreign involvement in US nonprofits has been of interest to Republicans on the Committee for some time, and last year they called on the IRS to revoke the tax-exempt status of multiple organizations for failing to operate within their stated tax-exempt purpose. "Republicans and Democrats should work together to stop foreign actors from interfering with our politics and public discourse through non-profits … " Chairman Jason Smith (R-MO) said in an opening statement today. "The manipulation and abuse of tax-exempt status by foreign nationals is unacceptable."

While focusing much of his opening statement toward scrutiny of donations related to the President, Ranking Member Richard Neal (D-MA) did acknowledge, "We need a serious and good-faith conversation about corruption and foreign influence that's bending politics to benefit the well-connected and costing taxpayers." He also said IRS workforce reductions have weakened enforcement capabilities.

More information is available in the attached WCEY Alert.