H.R.7799

Federal HB7799 amends the Internal Revenue Code to hold 501(c)(3) organizations liable for misuse of funds as fiscal sponsors.

Federal HB7799, also known as the Stop Proxy Organizations Nurturing Subversive Operations and Riots Act or the SPONSOR Act, amends the Internal Revenue Code of 1986. It adds a new subsection to Section 501, making 501(c)(3) organizations liable for criminal and civil penalties if they sponsor activities involving force, threats, or obstruction of lawful commerce. The bill presumes these organizations are responsible for ensuring their funds are used lawfully, though they can defend against liability claims by demonstrating due diligence and reasonable oversight.