House Committee Advances Bill Requiring Nonprofits to Report Foreign Donor Data to IRS

The House Ways and Means Committee voted 23-18 last Wednesday to advance the Foreign Funding Transparency Act, a bill that would require tax-exempt nonprofits to collect and disclose donations from foreign nationals to the IRS, according to Fox News. It now needs approval from the full House, then the Senate, before it could reach a president's desk.

Committee Chairman Jason Smith, a Missouri Republican, said the investigation behind the bill uncovered what he called "shadowy networks of well-funded organizations" that have taken advantage of tax-exempt status for decades while accepting money and direction from foreign nationals. "From the outside, it looks like a movement," Smith said, according to Fox News. "But once you see how the money flows, it becomes clear that this is a machine."

Smith also said in a statement that "foreign influence and interference have plagued our tax-exempt sector" for too long, and that "foreign donations have no place in American politics, particularly when the sole goal is to manipulate our public discourse, promote propaganda and support violence," according to Fox News.

The Singham Connection

The committee's statement on the bill named Neville Roy Singham, a 72-year-old American businessman now based in Shanghai, according to Fox News. Singham sold his tech company in 2017 for $785 million and has since funded a network of nonprofits that Fox News reported has channeled $278 million into groups described as sympathetic to the Chinese Communist Party.

The House Ways and Means Committee has issued subpoenas as part of its investigation into three nonprofits tied to Singham's network, according to Fox News. Gordon Chang, a senior fellow at the Gatestone Institute and author of a book on the subject, has put the total size of the network's funding at $591 million, according to commentary cited by Fox News.

These are allegations arising from a congressional investigation and public commentary, not the findings of a criminal indictment or a court judgment. No charges have been filed against Singham or the named nonprofits as of now. The subpoenas mean the committee is compelling records and testimony, not that wrongdoing has been proven. Singham did not respond to Fox News Digital's requests for comment, according to Fox News.

The Rubio Speech

A week before the committee vote, Secretary of State Marco Rubio spoke at a Washington summit on what Fox News described as far-left political terrorism. Rubio said the U.S. counterterrorism doctrine has "had a blind spot" for extremist violence from the political left, adding that "even today, the very idea that far-left terrorism could be a serious threat is treated as a right-wing fever dream." He also said international cooperation was critical to disrupting the financing of organizations working with hostile foreign states, according to Fox News.

Rubio's remarks didn't name any individual or organization, according to Fox News. The committee's own statement, not Rubio's speech, is what tied the bill to Singham specifically.

What Supporters Say, What Critics Would Likely Argue

Supporters of the bill argue transparency about foreign money in the tax-exempt sector is basic good governance. American campaign finance law already bars foreign nationals from directly donating to political campaigns. Extending disclosure requirements to nonprofits that fund political activity, advocates argue, is a logical extension of that principle rather than a new restriction on speech.

Civil liberties advocates and some nonprofit groups would likely raise an objection based on concerns that expanded donor disclosure requirements can chill legitimate advocacy and expose donors to harassment. Whether a federal law targeting only foreign national donations would survive legal scrutiny on those grounds is an open question the bill's text alone doesn't resolve.

What Happens Next

The bill has passed the House Ways and Means Committee by a 23-18 vote. It has not passed the full House, has not been considered by the Senate, and has not been signed into law. Any of those steps could change or stall the bill's substance.

The House Ways and Means Committee's investigation into Singham's network continues, with subpoenas already issued to three affiliated nonprofits, according to Fox News. Whether that investigation produces evidence of specific legal violations, as opposed to disclosure gaps the new bill aims to close going forward, remains to be seen.