Foreign Funding Transparency Act

119th Congress Introduced by David Schweikert

Large tax-exempt groups must publicly disclose yearly foreign contributions, broken down by country of concern, on their tax returns.

Introduced in House

Foreign Funding Transparency Act (H.R. 9772, 119th Congress)

Purpose and intent

The bill aims to increase transparency around foreign contributions to certain tax-exempt organizations by mandating annual disclosure of foreign funding data on tax returns.

Key provisions

Reporting requirement added to tax return (Section 6033, redesignated):

Introduces new subsection (p) for “Contributions Received from Foreign Sources.”
Specified tax-exempt organizations must itemize foreign contributions on their annual return.

What must be disclosed:

(A) The aggregate amount of contributions received from foreign nationals during the taxable year.
(B) The aggregate amount of such contributions stated separately for each foreign country of concern, defined by the bill.

Definition of key terms:

Foreign country of concern: A country identified under the bill as a focus for disclosure (linked to a definition in the act’s referenced “Research and Development, Competition, and Innovation Act” section 10612).
Foreign national: As defined by the bill in relation to contributions (drawing from the Federal Election Campaign Act context).
Specified tax-exempt organization: A 501(c) organization that either
had gross receipts in the preceding year of at least $200,000, or
had assets at the end of the preceding year of at least $500,000.

Reliance on donor representation:

The organization may rely on a donor’s own representation of their nationality unless the organization knows or should know the representation is false.

Regulatory and compliance authority:

The Secretary of the Treasury (IRS) may issue regulations requiring collection of information from foreign contributors at times and in manners the Secretary deems appropriate to support this subsection.

Applicability and timing

Effective date:

The new disclosure requirements apply to tax returns for taxable years beginning after the date that is 1 year after enactment of the Act.

Who is affected

Targeted organizations:

Specified tax-exempt organizations under 501(c) that meet the financial thresholds (gross receipts ≥ $200,000 or assets ≥ $500,000).

Contributors:

Foreign nationals who donate to these organizations, with potential confirmation or collection of nationality information as determined by regulations.

Potential impact

Transparency and monitoring:

Creates a public-facing accounting of foreign funding to larger tax-exempt groups, potentially enabling oversight of foreign influence on such organizations.

Administrative burden:

Organizations meeting the threshold would need to track and report foreign contributions by country of concern, which could involve data collection from donors and record-keeping enhancements.

Regulatory leverage:

The Treasury Secretary’s regulatory authority could set procedures for collecting donor nationality information, timing, and methods.

Summary

H.R. 9772 would require certain large tax-exempt organizations to disclose annual totals of foreign contributions, including breakdowns by foreign country of concern, on their tax returns. It defines which organizations are subject to the rule, how to treat donor nationality information, and gives the IRS authority to regulate the data collection process. The statute would take effect for tax years beginning one year after enactment.