Sponsors (5)
Last progress June 12, 2025 (8 months ago)
Introduced on June 12, 2025 by Lance Gooden
Referred to the House Committee on Ways and Means.
Requires many U.S. tax-exempt organizations to file annual reports listing any gifts or contributions over $10,000 from specified foreign governments, foreign political parties, or foreign-directed entities, and directs the Treasury/IRS to publish that information in a searchable public database. The law also directs the IRS to report annual totals specifically for the People’s Republic of China, the Chinese Communist Party, and entities directed or controlled by them. The change is added to the Internal Revenue Code, applies to returns for taxable years beginning after enactment, and creates new recordkeeping, reporting, and public-transparency obligations for affected nonprofits, colleges, think tanks, museums, and other tax-exempt groups, while imposing a new publication duty on the Secretary of the Treasury/IRS.
Foreign governments and foreign political parties try to influence the U.S. government and political system by donating to nonprofit charities, especially think tanks and cultural organizations; unlike colleges, think tanks and other tax-exempt groups are not required to disclose foreign gifts to the Department of Education.
The Department of Defense reported that China conducts influence operations against cultural institutions, media, business, academic, and policy communities, and uses academia, think tanks, and state-run media to advance its soft power and security objectives.
The unclassified March 2025 Annual Threat Assessment says the Chinese government is likely to increase malign influence in coming years, and lack of transparency about Chinese funding to U.S. organizations is a growing national security risk.
The Chinese Communist Party targets think tanks as part of its united front work, a mix of engagement, influence activities, and intelligence operations; the Central United Front Work Department (UFWD) coordinates united front work and oversees U.S.-operating organizations.
A Hoover Institution report found China’s influence activities now target a wider range of Western sectors, including think tanks, to promote views favorable to the Chinese government and co-opt U.S. citizens.
Who is affected and how:
Tax-exempt organizations (nonprofits, think tanks, research centers, museums, and many colleges and universities) will be directly affected: they must identify donors that qualify as specified foreign governments, foreign political parties, or foreign-directed entities, track receipts from those sources, and report any single source total over $10,000 per taxable year. That creates additional administrative work, recordkeeping, and possible legal review to determine whether donors meet the statutory definition.
The IRS/Treasury will need to build processes and a public, searchable database to receive, verify, and publish the new reports. That requires staff time, IT development, and ongoing maintenance.
Donors and foreign entities will be affected indirectly: contributions above the threshold will be publicly visible, which may deter some donors or push them to change giving practices (smaller gifts below the threshold, intermediated gifts, or different donor-advised strategies). Foreign governments or entities will be singled out in public totals, especially those tied to China/CCP.
Recipients may face reputational risk: public disclosure can prompt media, funder, research partner, and public scrutiny, which could affect fundraising, partnerships, and institutional priorities.
Legal and operational consequences: organizations may incur compliance costs (policy reviews, legal counsel, donor vetting) and could face IRS penalties for incomplete or inaccurate reporting. There is some risk of litigation or constitutional challenges in edge cases (e.g., donor privacy or association claims), though the statute focuses on financial transparency.
Overall effect: increased transparency about foreign funding flows and potential reduction of opaque foreign influence, balanced against new compliance costs for nonprofits and administrative burden on the IRS, plus possible chilling effects on lawful foreign-supported activity or scholarship.