A bill to require audits of institutions with respect to disclosures of foreign gifts, and for other purposes.

This bill adds a new audit regime and new taxes aimed at ensuring colleges and universities disclose foreign gifts and funding. It requires the Secretary of Education, beginning within 60 days of enactment and every two years thereafter, to audit at least 30 institutions to check compliance with reporting requirements for foreign gifts under the Higher Education Act. Audits prioritize institutions with large endowments, histories of foreign gifts or contracts, prior noncompliance, public reporting of foreign contributions from entities of concern, or formal federal agreements. Results must be reported to Congress and publicly posted on the Education Department website within 30 days of audit completion. In addition, the bill creates excise taxes on foreign funding received by colleges and universities. Two taxes are added to the Internal Revenue Code: (1) a 300% excise tax on income from foreign countries of concern for certain eligible institutions, and (2) a 110% excise tax on unreported foreign funding following an audit. The taxes apply to taxable years beginning after the date 60 days after enactment and include specific definitions for “applicable institution” and “foreign country of concern.” If unreported funding involves a country of concern, the 300% tax can be charged in addition to the 110% tax. The Secretary’s audit findings determine the timing of the 110% tax, due within 180 days after the audit results. In short, the bill combines public audit scrutiny of disclosures with steep financial penalties intended to deter incomplete reporting of foreign gifts and funding.