Foreign money to U.S. elections: tax-exempt orgs now face penalties and revocation
H.R. 2265 — No Foreign Election Interference Act · Filed by Nicole Malliotakis (R-NY) · Introduced Mar 21, 2025 · Referred to committee
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What it does
This bill penalizes tax-exempt organizations (nonprofits, charities, foundations) that accept money from foreign nationals and then donate to political committees. Organizations meeting size thresholds ($200k+ gross receipts or $500k+ assets) face a penalty equal to twice the amount of any political donation if they received foreign funds in the prior 8 years. After a third such violation, the organization loses its tax-exempt status entirely.
Why we flagged it
The bill's operative mechanism is a penalty and tax-status revocation targeting a specific conduct: tax-exempt organizations accepting foreign funds and donating to political committees. It is a direct regulatory response to a foreign-interference vector, not a tax cut, subsidy, or deregulation.
What the text implies
- Organizations that receive foreign donations must either cease political giving or face escalating penalties—creates a chilling effect on political participation by orgs with any foreign funding, even if unintentional or from diaspora communities.
- The 8-year lookback window is broad and retroactive to enactment; orgs that accepted foreign funds years ago and later donate to a political committee face penalties, creating compliance uncertainty for existing donors.
- Loss of tax-exempt status after three violations is permanent for that taxable year forward, effectively dissolving the organization's tax-exempt mission even if the political donations were a small fraction of activity.
- No safe harbor for good-faith mistakes or for foreign donations received without knowledge; the rule is strict liability based on the fact of foreign contribution + political donation, regardless of intent or disclosure.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
The bill restricts a mechanism by which foreign nationals could indirectly influence U.S. elections through tax-exempt organizations, and it removes tax benefits from organizations that participate in that scheme. Ordinary citizens benefit from reduced foreign interference in elections and from tax-exempt status being reserved for organizations that do not serve as conduits for foreign political money.
Named in the bill
Internal Revenue Service, Tax-exempt organizations (501(c)), Political committees, Foreign nationals, Federal Election Commission
Where it stands
- Mar 21, 2025 — Introduced · Congress.gov: “Introduced in House”
- Mar 21, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (3,655 characters) on Oct 31, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,778 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
As of — page rendered 2026-10-31.
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