This paper argues that the Internal Revenue Service should take a more active stance in denying tax exemption to organizations that finance terrorist activities abroad. The paper explores the well-established principle that organizations granted U.S. tax-exemption must act consistently with national public policy, and the application of that principle to charitable organizations that send monies overseas. To foster that policy, the Service should apply special guidelines to charitable organizations that channel contributions abroad, similar to the special guidelines in effect for tax-exempt private schools. In addition, legislative changes should be made to advance such a goal in order to provide additional legal support for necessary changes in the Service's policy.
Mindy Herzfeld, Restricting the Flow of Funds from U.S. Charities to International Terrorist Organizations - A Proposal, 56 Tax Law. 875 (2003), available at