No Foreign Election Interference Act
No Foreign Election Interference Act is a bill that would add new penalties under the Internal Revenue Code for certain tax-exempt organizations (primarily many nonprofits) that contribute to political committees if those organizations have received contributions from foreign nationals. The core idea is to deter foreign influence in U.S. elections by tying one's tax-exempt status and penalties to the source of a nonprofit’s funds. If an organization that meets size thresholds (based on receipts or assets) makes disqualified political contributions, it would owe penalties equal to twice the amount of the contribution. The act also creates a mechanism to revoke tax-exempt status after a third disqualified political contribution, with a transitional rule that allows up to three such contributions if certain conditions apply. The provisions take effect for contributions made on or after January 1, 2026. The bill was introduced in the House by Representative Nicole Malliotakis and referred to the Committee on Ways and Means. It defines foreign nationals according to existing FECA definitions and sets up an eight-year “testing period” for determining whether a given contribution is disqualified. It targets larger tax-exempt organizations (with substantial gross receipts or assets) and includes transitional rules for organizations whose exemption is tied to other criteria.
Key Points
- 1Penalty for disqualified contributions: Any specified tax-exempt organization that makes a disqualified political committee contribution must pay a penalty equal to twice the amount of that contribution.
- 2What counts as a disqualified contribution: A contribution to a political committee by a 501(c) organization that had received any contribution or gift from a foreign national during the organization’s testing period (an 8-year window ending on the date of the contribution).
- 3Testing period: The 8-year period ending on the date of the disqualified contribution, with the period starting after enactment (no pre-enactment period is counted).
- 4Which organizations are subject (specified tax-exempt organizations): 501(c) groups that for the taxable year have either gross receipts of $200,000 or more, or assets of $500,000 or more. There are special transitional provisions for organizations that lose exemption solely due to certain other rules.
- 5Revocation of tax-exempt status after third disqualified contribution: An organization that makes more than two disqualified contributions loses its tax-exempt status for any taxable year ending on or after the date of the third disqualified contribution.
- 6Effective date: The amendments apply to contributions made on or after January 1, 2026 by organizations described in section 501(c) of the Internal Revenue Code.