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A bill to amend the Internal Revenue Code of 1986 to modify eligibility for 501(c)(3) status.
2/11/2025, 11:56 AM
Summary of Bill S 497
Currently, in order to qualify for 501(c)(3) status, organizations must be operated exclusively for religious, charitable, scientific, literary, or educational purposes. This bill seeks to modify this eligibility criteria by potentially expanding the types of organizations that can qualify for this tax-exempt status.
The specific details of the modifications proposed in Bill 119 s 497 are not explicitly outlined in the summary, but it is clear that the intent is to broaden the scope of organizations that can qualify for 501(c)(3) status. This could potentially have significant implications for the types of organizations that are able to receive tax-exempt status and the benefits that come with it. Overall, Bill 119 s 497 represents an effort to update and modernize the criteria for 501(c)(3) eligibility in order to better reflect the diverse range of organizations that exist in today's society. It will be important to closely monitor the progress of this bill and any potential amendments or changes that may arise during the legislative process.
Congressional Summary of S 497
Fixing Exemptions for Networks Choosing to Enable Illegal Migration Act or the FENCE Act
This bill denies federal tax-exempt status under Internal Revenue Code (IRC) Section 501(c)(3) to an organization that engages in a pattern or practice of providing financial assistance, benefits, services, or other material support to individuals that such organization knows or reasonably should know are unlawfully present in the United States. However, the bill does not require an organization to verify an individual’s citizenship or immigration status, or act in violation of religious beliefs.
As background, an organization may be exempt from federal income tax under IRC Section 501(c)(3) if it is organized and operated exclusively (1) for religious, charitable, scientific, literary, or educational purposes; (2) for testing for public safety; (3) for the prevention of cruelty to children or animals; or (4) to foster national or international amateur sports competition (subject to limitations). However, under current law, a tax-exempt organization may not be organized for an illegal purpose or engage in substantial illegal activity.
