Proposal Takes Aim at Charities That Avoid Taxes Offshore

Sen. Charles E. Grassley, senior Republican on the Senate Judiciary Committee, has introduced legislation that would deny some federal money to charities that put money in offshore accounts to avoid paying income taxes.

The Iowa senator has proposed barring such charities from getting grants from a federal program that helps prisoners re-enter society.

Grassley’s move, an amendment to a bill pending in the Judiciary Committee to extend the so-called Second Chance Act, takes aim at unrelated business income tax. Those are taxes that charities owe on income they earn from businesses that are not directly tied to their charitable missions.