Under the bill, the Treasury secretary would issue notice to a group of intent to designate it as a “terrorist supporting organization.” Once notified, an organization would have the right to appeal within 90 days, after which it would be stripped of its 501(c)(3) status, named for the statute that confers tax exemptions on recognized nonprofit groups.
The law would not require officials to explain the reason for designating a group, nor does it require the Treasury Department to provide evidence.
“It basically empowers the Treasury secretary to target any group it wants to call them a terror supporter and block their ability to be a nonprofit,” said Ryan Costello, policy director at the National Iranian American Council Action, which opposes the law. “So that would essentially kill any nonprofit’s ability to function. They couldn’t get banks to service them, they won’t be able to get donations, and there’d be a black mark on the organization, even if it cleared its name.”
I don't get it. If an organisation loses its tax-exempt status, it will have to pay tax. This would definitely be bad news for the organisation. But how does it 'kill any nonprofit’s ability to function'? Why would they be unable to get banks to service them or get donations? Is it just hyperbole, or am I missing something?
My guess, and it's just a guess, is the intent is to end independent media. PBS and NPR are 90% funded by donations. People won't donate anymore if they can't write off the donations, effectively killing them.