SPONSOR Act

This Act may be cited as the Stop Proxy Organizations Nurturing Subversive Operations and Riots Act or the SPONSOR Act.
Section 501 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
If—
an organization described in subsection (c)(3) expends funds for a fiscal sponsorship, and
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,
For purposes of this subsection, the term covered activity means—
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,
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
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 this subsection, the term fiscal sponsorship means a relationship in which an organization described in subsection (c)(3)—
agrees to receive and administer funds on behalf of a project or organization that is not exempt from tax under subsection (a), and
retains discretion and control over such funds to ensure they are used for the purposes for which such organization was organized and operated.
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.
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.