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

Summary

Requires the Department of Education to begin audits within 60 days and then every two years of at least 30 colleges and universities to check whether they properly reported foreign gifts and contracts. Creates new excise taxes in the Internal Revenue Code that impose steep penalties on covered institutions that receive income from specified foreign countries (300% tax) and on institutions that fail to report required foreign funding found by the audits (110% tax). The audits must prioritize institutions with very large endowments, prior large foreign funding or noncompliance, public reports of funding from certain foreign entities, or formal federal agreements; audit results must be reported to Congress and posted publicly. The tax provisions take effect for taxable years beginning after the date 60 days following enactment and include related-organization rules and payment deadlines for assessed taxes.

• Requires the Department of Education to audit at least 30 higher-education institutions every two years to check foreign gift/contract reporting.
• Audits must prioritize very large endowments, prior large foreign funding, prior noncompliance, reported funding from entities of concern, or formal federal agreements.
• Establishes a 300% excise tax on income received from a defined “foreign country of concern” by certain qualifying institutions.
• Creates a 110% excise tax on foreign gifts/contracts found by audit to have been required but not reported under HEA §117.
• 4970 tax (110%) is due within 180 days of audit notification; both taxes can apply to the same funds in some cases.
• Definitions and tax aggregation rules reference existing statutes, potentially broadening the taxa ble base via related-organization rules.
• Audit reports must be provided to congressional leaders, any requesting Member of Congress, and posted publicly within 30 days of completion.
• Tax provisions apply to taxable years beginning after the date 60 days following enactment, while audits begin within 60 days of enactment.