On December 17, 2025, two Republicans filed the same bill in the two chambers of Congress. One went to the House Ways and Means Committee. The other went to Senate Finance. Neither has moved since.
Its official title says what it does: to "terminate the tax-exempt status of terrorist supporting organizations." In practice that means letting the Secretary of the Treasury designate a nonprofit as a terrorist supporter and cut off the tax status it runs on.
The last time that power came up for a vote, it had a name on it: Claudia Tenney's. Not because she invented it — she didn't — but because she took it and bolted it to something nobody in Congress opposed: tax relief for Americans held hostage abroad.
Two bills, both already moving
In the spring of 2024, both halves of what became Tenney's bill existed on their own.
The first was a bill by Rep. David Kustoff of Tennessee, introduced in November 2023, with that same terrorist-supporting-organizations title. Tenney cosponsored it. On April 15, 2024, it passed the House 382 to 11, with Tenney voting yes. The Senate never took it up.
The second was the hostage fix. In March 2024 Dina Titus, a Nevada Democrat, introduced a bill to stop the IRS from charging Americans penalties and late fees for taxes they couldn't file while being held hostage or wrongfully detained — and Tenney signed on as an original cosponsor. Senators Chris Coons and Mike Rounds ran the Senate version, and on May 2, 2024 announced that it "has been unanimously cleared by the Senate," urging the House to pass it.
The House never did.
Tenney's package
On September 9, 2024, Tenney introduced H.R. 9495, the Stop Terror-Financing and Tax Penalties on American Hostages Act. It did two things. It carried the hostage tax relief. And its Section 4 was Kustoff's nonprofit bill, word for word.
Tie two things together and a member can no longer vote for one without the other. On H.R. 9495, a vote for the hostage relief that had cleared the Senate unopposed was also a vote for the designation power.
What the designation power does
Here is the machinery, in the text the House passed.
Treasury mails a nonprofit a letter saying the Secretary will designate it. The letter has to name the group Treasury says it supported, and give "a description of such material support or resources" — but only "to the extent consistent with national security and law enforcement interests." In other words, the government decides how much of its evidence you get to see.
The organization then has 90 days. It can show it didn't do it — "to the satisfaction of the Secretary," meaning the official accusing you also decides whether you've cleared yourself. Or it can try to get the money back and certify in writing that it won't do it again. Fail at both and the designation lands.
If the organization goes to court, any classified evidence behind the decision "may be submitted to the reviewing court ex parte and in camera" — privately, to the judge, without the organization's lawyers.
There is no criminal charge in any of this. No conviction. No jury.
What Tenney said it did
Here is how Tenney described that section the day her bill passed:
"Additionally, this legislation requires the IRS to revoke the tax-exempt status of any organization that provides financial support or resources to designated terrorist groups."
Read that against the text. The decision belongs to the Secretary of the Treasury, a political appointee. It isn't limited to "financial support" — it covers "material support or resources" above "a de minimis amount" at any point in the three years before the designation. And the organization is designated unless it satisfies the Secretary, not a court, that it didn't do it.
Her press release also leaned on a hostage from her own district: "NY-24's own Ryan Corbett," held by the Taliban since August 2022.
Then Trump won
The House voted on H.R. 9495 twice, a week after the 2024 election and again nine days later. Nothing in the text changed between the two votes.
On November 12, Republican leaders brought it up under suspension of the rules, which needs two-thirds. More than 100,000 people had sent messages to their members asking them to oppose it. It failed, 256 to 145 — 204 Republicans and 52 Democrats for it, 144 Democrats and Thomas Massie against.
The ACLU had led a coalition of more than 180 organizations — Planned Parenthood, the AFL-CIO, the United Auto Workers, the NAACP — in a letter to Congress, and said the bill would give "the incoming Trump administration new power to muzzle, punish, and effectively shut down tax-exempt organizations without transparency or appropriate due process." It also pointed out that the hostage provision "already passed the Senate as a stand-alone bill," and that "the fastest way for it to become law is for the House to simply pass the Senate bill."
Rep. Lloyd Doggett of Texas, who led the opposition, put it this way:
"In this mislabeled bill, House Republicans are hiding behind hostages."
Ways and Means chairman Jason Smith answered that "this shameful partisan play only sets back efforts to halt the abuse of America's tax code by terrorist organizations."
On November 21, leadership brought it back under a rule needing only a simple majority. It passed, 219 to 184. Republicans voted exactly as before, 204 to 1, with Massie again the lone no. Tenney, Kustoff, Nicole Malliotakis, Nick LaLota, Nick Langworthy and Mike Lawler all voted yes.
Count the Democrats across that year. In April, 179 of them voted for the designation power on its own. On November 12, with the election over, 52 voted for the package. On November 21, 15 did. The words were the same. What had changed was who would be Treasury Secretary.
The Senate received the bill on December 2, 2024, and never acted on it. It died there — and the hostage relief it carried died with it.
Ryan Corbett came home in a prisoner swap on January 21, 2025, after what his family called "894 days."
The administration found another route
On September 25, 2025, Trump signed a national security memorandum called NSPM-7. It directs Treasury to "identify and disrupt financial networks that fund domestic terrorism and political violence," and directs the IRS commissioner to "take action to ensure that no tax-exempt entities are directly or indirectly financing political violence or domestic terrorism." The ACLU called the memo "a fever dream of conspiracies, outright falsehoods" and the president's distorted equation of criticism with terrorism. We've written about how ICE is already scanning social media and subpoenaing the identities of its critics, with no one charged.
And at the state level, the terrorist label is already being hung on a nonprofit: in Texas, Greg Abbott declared the state's largest Muslim civil rights group a terrorist organization, and twelve of his thirteen reasons match a report by a fellow at an anti-Muslim think tank.
Both halves are back — apart
The bills filed on December 17, 2025 are the designation power on its own again: H.R. 6800 from Kustoff in the House, S. 3554 from John Cornyn in the Senate. No hostage relief this time. The text has been revised: Treasury must now tell an organization when it is withholding part of the evidence, and humanitarian aid approved by Treasury's sanctions office is excluded. The core is unchanged — the Secretary designates, and the organization has to satisfy the Secretary to escape it.
The House version sits in Ways and Means, Tenney's own committee. So does the clean hostage tax bill French Hill introduced on March 5, 2025, which Tenney cosponsored the day it was filed. It hasn't moved in seventeen months. Neither has its Senate version.
In 2024 the hostage fix had cleared the Senate without a single objection, and the House could have sent it to the president on its own. Tenney tied it to a power most House Democrats would no longer vote for once it belonged to Trump's Treasury Secretary. The package died, and Americans held hostage abroad are still waiting.
Source
H.R. 9495 — Stop Terror-Financing and Tax Penalties on American Hostages Act, 118th Congress, sponsored by Rep. Claudia Tenney; H.R. 6408, sponsored by Rep. David Kustoff. Photo: official congressional portrait.
