H.R. 7799

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7799 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 7799

To amend the Internal Revenue Code of 1986 to provide that 501(c)(3) 
organizations are liable for the use of funding provided as a fiscal 
sponsor.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

March 4, 2026

Mr. Moran introduced the following bill; which was referred to the 
Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to provide that 501(c)(3) 
organizations are liable for the use of funding provided as a fiscal 
sponsor.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Stop Proxy Organizations Nurturing 
Subversive Operations and Riots Act'' or the ``SPONSOR Act''.

SEC. 2. LIABILITY OF TAX-EXEMPT FISCAL SPONSORS FOR SPONSORED 
ACTIVITIES.

Section 501 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new subsection:
``(s) Liability of Fiscal Sponsors for Sponsored Activities.--
``(1) In general.--If--
``(A) an organization described in subsection 
(c)(3) expends funds for a fiscal sponsorship, and
``(B) a deduction under section 170 is allowed to 
any donor, or such organization represents to any donor 
that the donor is entitled to a deduction under section 
170, with respect to a contribution to the organization 
for purposes of such fiscal sponsorship,
then the organization shall bear any criminal liability related 
to or arising from such fiscal sponsorship, and any civil 
liability concerning a covered activity related to or arising 
from such fiscal sponsorship.
``(2) Covered activity.--For purposes of this subsection, 
the term `covered activity' means--
``(A) aiding and abetting an act of international 
terrorism committed, planned, or authorized by an 
organization that had been designated as a foreign 
terrorist organization under section 219 of the 
Immigration and Nationality Act (8 U.S.C. 1189), as of 
the date on which such act of international terrorism 
was committed, planned, or authorized, by knowingly 
providing substantial assistance, or conspiring with 
the person who committed such an act of international 
terrorism,
``(B) by force or a specified and credible threat 
of force, or by physical obstruction, intentionally 
injuring, intimidating or interfering with or 
attempting to injure, intimidate or interfere with any 
person lawfully exercising or seeking to exercise a 
constitutional right, or
``(C) by using force or a specified credible threat 
of force or by physically blocking the movement of any 
article or commodity in commerce to intentionally 
prevent the lawful movement of interstate and 
intrastate commerce.
For purposes of the preceding sentence, the term `intimidate' 
means to place an individual in reasonable apprehension of 
bodily harm to such individual or to another.
``(3) Fiscal sponsorship.--For purposes of this subsection, 
the term `fiscal sponsorship means' a relationship in which an 
organization described in subsection (c)(3)--
``(A) agrees to receive and administer funds on 
behalf of a project or organization that is not exempt 
from tax under subsection (a), and
``(B) retains discretion and control over such 
funds to ensure they are used for the purposes for 
which such organization was organized and operated.
``(4) Presumption of responsibility.--An organization to 
which paragraph (1) applies is presumed to be responsible for 
ensuring that the manner in which its funds are used under any 
fiscal sponsorship complies with applicable laws, regulations, 
and tax obligations.
``(5) Defenses.--The liability established by this 
subsection does not bar the organization described in 
subsection (c)(3) from defenses based on exercise of due 
diligence and reasonable oversight.''.
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