[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4762 Enrolled Bill (ENR)]
H.R.4762
One Hundred Sixth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Monday,
the twenty-fourth day of January, two thousand
An Act
To amend the Internal Revenue Code of 1986 to require 527 organizations
to disclose their political activities.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

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(a) In General.--Section 527 of the Internal Revenue Code of 1986
(relating to political organizations) is amended by adding at the end
the following new subsection:
``(i) Organizations Must Notify Secretary That They Are Section 527
Organizations.--
``(1) In general.--Except as provided in paragraph (5), an
organization shall not be treated as an organization described in
this section--
``(A) unless it has given notice to the Secretary,
electronically and in writing, that it is to be so treated, or
``(B) if the notice is given after the time required under
paragraph (2), the organization shall not be so treated for any
period before such notice is given.
``(2) Time to give notice.--The notice required under paragraph
(1) shall be transmitted not later than 24 hours after the date on
which the organization is established.
``(3) Contents of notice.--The notice required under paragraph
(1) shall include information regarding--
``(A) the name and address of the organization (including
any business address, if different) and its electronic mailing
address,
``(B) the purpose of the organization,
``(C) the names and addresses of its officers, highly
compensated employees, contact person, custodian of records,
and members of its Board of Directors,
``(D) the name and address of, and relationship to, any
related entities (within the meaning of section 168(h)(4)), and
``(E) such other information as the Secretary may require
to carry out the internal revenue laws.
``(4) Effect of failure.--In the case of an organization
failing to meet the requirements of paragraph (1) for any period,
the taxable income of such organization shall be computed by taking
into account any exempt function income (and any deductions
directly connected with the production of such income).
``(5) Exceptions.--This subsection shall not apply to any
organization--
``(A) to which this section applies solely by reason of
subsection (f)(1), or
``(B) which reasonably anticipates that it will not have
gross receipts of $25,000 or more for any taxable year.
``(6) Coordination with other requirements.--This subsection
shall not apply to any person required (without regard to this
subsection) to report under the Federal Election Campaign Act of
1971 (2 U.S.C. 431 et seq.) as a political committee.''.
(b) Disclosure Requirements.--
(1) Inspection at internal revenue service offices.--
(A) In general.--Section 6104(a)(1)(A) of the Internal
Revenue Code of 1986 (relating to public inspection of
applications) is amended--
(i) by inserting ``or a political organization is
exempt from taxation under section 527 for any taxable
year'' after ``taxable year'';
(ii) by inserting ``or notice of status filed by the
organization under section 527(i)'' before ``, together'';
(iii) by inserting ``or notice'' after ``such
application'' each place it appears;
(iv) by inserting ``or notice'' after ``any
application'';
(v) by inserting ``for exemption from taxation under
section 501(a)'' after ``any organization'' in the last
sentence; and
(vi) by inserting ``or 527'' after ``section 501'' in
the heading.
(B) Conforming amendment.--The heading for section 6104(a)
of such Code is amended by inserting ``or notice of status''
before the period.
(2) Inspection of notice on internet and in person.--Section
6104(a) of such Code is amended by adding at the end the following
new paragraph:
``(3) Information available on internet and in person.--
``(A) In general.--The Secretary shall make publicly
available, on the Internet and at the offices of the Internal
Revenue Service--
``(i) a list of all political organizations which file
a notice with the Secretary under section 527(i), and
``(ii) the name, address, electronic mailing address,
custodian of records, and contact person for such
organization.
``(B) Time to make information available.--The Secretary
shall make available the information required under
subparagraph (A) not later than 5 business days after the
Secretary receives a notice from a political organization under
section 527(i).''.
(3) Inspection by committee of congress.--Section 6104(a)(2) of
such Code is amended by inserting ``or notice of status of any
political organization which is exempt from taxation under section
527 for any taxable year'' after ``taxable year''.
(4) Public inspection made available by organization.--Section
6104(d) of such Code (relating to public inspection of certain
annual returns and applications for exemption) is amended--
(A) by striking ``and Applications for Exemption'' and
inserting ``, Applications for Exemption, and Notices of
Status'' in the heading;
(B) by inserting ``or notice of status under section
527(i)'' after ``section 501'' and by inserting ``or any notice
materials'' after ``materials'' in paragraph (1)(A)(ii);
(C) by inserting or ``or such notice materials'' after
``materials'' in paragraph (1)(B); and
(D) by adding at the end the following new paragraph:
``(6) Notice materials.--For purposes of paragraph (1), the
term `notice materials' means the notice of status filed under
section 527(i) and any papers submitted in support of such notice
and any letter or other document issued by the Internal Revenue
Service with respect to such notice.''.
(c) Failure To Make Public.--Section 6652(c)(1)(D) of the Internal
Revenue Code of 1986 (relating to public inspection of applications for
exemption) is amended--
(1) by inserting ``or notice materials (as defined in such
section)'' after ``section)''; and
(2) by inserting ``and notice of status'' after ``exemption''
in the heading.
(d) Effective Date.--
(1) In general.--Except as provided in paragraphs (2) and (3),
the amendments made by this section shall take effect on the date
of the enactment of this section.
(2) Organizations already in existence.--In the case of an
organization established before the date of the enactment of this
section, the time to file the notice under section 527(i)(2) of the
Internal Revenue Code of 1986, as added by this section, shall be
30 days after the date of the enactment of this section.
(3) Information availability.--The amendment made by subsection
(b)(2) shall take effect on the date that is 45 days after the date
of the enactment of this section.

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(a) Required Disclosure of 527 Organizations.--Section 527 of the
Internal Revenue Code of 1986 (relating to political organizations), as
amended by section 1(a), is amended by adding at the end the following
new section:
``(j) Required Disclosure of Expenditures and Contributions.--
``(1) Penalty for failure.--In the case of--
``(A) a failure to make the required disclosures under
paragraph (2) at the time and in the manner prescribed
therefor, or
``(B) a failure to include any of the information required
to be shown by such disclosures or to show the correct
information,
there shall be paid by the organization an amount equal to the rate
of tax specified in subsection (b)(1) multiplied by the amount to
which the failure relates.
``(2) Required disclosure.--A political organization which
accepts a contribution, or makes an expenditure, for an exempt
function during any calendar year shall file with the Secretary
either--
``(A)(i) in the case of a calendar year in which a
regularly scheduled election is held--
``(I) quarterly reports, beginning with the first
quarter of the calendar year in which a contribution is
accepted or expenditure is made, which shall be filed not
later than the fifteenth day after the last day of each
calendar quarter, except that the report for the quarter
ending on December 31 of such calendar year shall be filed
not later than January 31 of the following calendar year,
``(II) a pre-election report, which shall be filed not
later than the twelfth day before (or posted by registered
or certified mail not later than the fifteenth day before)
any election with respect to which the organization makes a
contribution or expenditure, and which shall be complete as
of the twentieth day before the election, and
``(III) a post-general election report, which shall be
filed not later than the thirtieth day after the general
election and which shall be complete as of the twentieth
day after such general election, and
``(ii) in the case of any other calendar year, a report
covering the period beginning January 1 and ending June 30,
which shall be filed no later than July 31 and a report
covering the period beginning July 1 and ending December 31,
which shall be filed no later than January 31 of the following
calendar year, or
``(B) monthly reports for the calendar year, beginning with
the first month of the calendar year in which a contribution is
accepted or expenditure is made, which shall be filed not later
than the twentieth day after the last day of the month and
shall be complete as if the last day of the month, except that,
in lieu of filing the reports otherwise due in November and
December of any year in which a regularly scheduled general
election is held, a pre-general election report shall be filed
in accordance with subparagraph (A)(i)(II), a post-general
election report shall be filed in accordance with subparagraph
(A)(i)(III), and a year end report shall be filed not later
than January 31 of the following calendar year.
``(3) Contents of report.--A report required under paragraph
(2) shall contain the following information:
``(A) The amount of each expenditure made to a person if
the aggregate amount of expenditures to such person during the
calendar year equals or exceeds $500 and the name and address
of the person (in the case of an individual, including the
occupation and name of employer of such individual).
``(B) The name and address (in the case of an individual,
including the occupation and name of employer of such
individual) of all contributors which contributed an aggregate
amount of $200 or more to the organization during the calendar
year and the amount of the contribution.
Any expenditure or contribution disclosed in a previous reporting
period is not required to be included in the current reporting
period.
``(4) Contracts to spend or contribute.--For purposes of this
subsection, a person shall be treated as having made an expenditure
or contribution if the person has contracted or is otherwise
obligated to make the expenditure or contribution.
``(5) Coordination with other requirements.--This subsection
shall not apply--
``(A) to any person required (without regard to this
subsection) to report under the Federal Election Campaign Act
of 1971 (2 U.S.C. 431 et seq.) as a political committee,
``(B) to any State or local committee of a political party
or political committee of a State or local candidate,
``(C) to any organization which reasonably anticipates that
it will not have gross receipts of $25,000 or more for any
taxable year,
``(D) to any organization to which this section applies
solely by reason of subsection (f)(1), or
``(E) with respect to any expenditure which is an
independent expenditure (as defined in section 301 of such
Act).
``(6) Election.--For purposes of this subsection, the term
`election' means--
``(A) a general, special, primary, or runoff election for a
Federal office,
``(B) a convention or caucus of a political party which has
authority to nominate a candidate for Federal office,
``(C) a primary election held for the selection of
delegates to a national nominating convention of a political
party, or
``(D) a primary election held for the expression of a
preference for the nomination of individuals for election to
the office of President.''.
(b) Public Disclosure of Reports.--
(1) In general.--Section 6104(d) of the Internal Revenue Code
of 1986 (relating to public inspection of certain annual returns
and applications for exemption), as amended by section 1(b)(4), is
amended--
(A) by inserting ``Reports,'' after ``Returns,'' in the
heading;
(B) in paragraph (1)(A), by striking ``and'' at the end of
clause (i), by inserting ``and'' at the end of clause (ii), and
by inserting after clause (ii) the following new clause:
``(iii) the reports filed under section 527(j)
(relating to required disclosure of expenditures and
contributions) by such organization,''; and
(C) in paragraph (1)(B), by inserting ``, reports,'' after
``return''.
(2) Disclosure of contributors allowed.--Section 6104(d)(3)(A)
of such Code (relating to nondisclosure of contributors, etc.) is
amended by inserting ``or a political organization exempt from
taxation under section 527'' after ``509(a))''.
(3) Disclosure by internal revenue service.--Section 6104(d) of
such Code is amended by adding at the end the following new
paragraph:
``(6) Disclosure of reports by internal revenue service.--Any
report filed by an organization under section 527(j) (relating to
required disclosure of expenditures and contributions) shall be
made available to the public at such times and in such places as
the Secretary may prescribe.''.
(c) Failure To Make Public.--Section 6652(c)(1)(C) of the Internal
Revenue Code of 1986 (relating to public inspection of annual returns)
is amended--
(1) by inserting ``or report required under section 527(j)''
after ``filing)'';
(2) by inserting ``or report'' after ``1 return''; and
(3) by inserting ``and reports'' after ``returns'' in the
heading.
(d) Effective Date.--The amendment made by subsection (a) shall
apply to expenditures made and contributions received after the date of
the enactment of this Act, except that such amendment shall not apply
to expenditures made, or contributions received, after such date
pursuant to a contract entered into on or before such date.

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(a) Return Requirements.--
(1) Organizations required to file.--Section 6012(a)(6) of the
Internal Revenue Code of 1986 (relating to political organizations
required to make returns of income) is amended by inserting ``or
which has gross receipts of $25,000 or more for the taxable year
(other than an organization to which section 527 applies solely by
reason of subsection (f)(1) of such section)'' after ``taxable
year''.
(2) Information required to be included on return.--Section
6033 of such Code (relating to returns by exempt organizations) is
amended by redesignating subsection (g) as subsection (h) and
inserting after subsection (f) the following new subsection:
``(g) Returns Required by Political Organizations.--In the case of
a political organization required to file a return under section
6012(a)(6)--
``(1) such organization shall file a return--
``(A) containing the information required, and complying
with the other requirements, under subsection (a)(1) for
organizations exempt from taxation under section 501(a), and
``(B) containing such other information as the Secretary
deems necessary to carry out the provisions of this subsection,
and
``(2) subsection (a)(2)(B) (relating to discretionary
exceptions) shall apply with respect to such return.''.
(b) Public Disclosure of Returns.--
(1) Returns made available by secretary.--
(A) In general.--Section 6104(b) of the Internal Revenue
Code of 1986 (relating to inspection of annual information
returns) is amended by inserting ``6012(a)(6),'' before
``6033''.
(B) Contributor information.--Section 6104(b) of such Code
is amended by inserting ``or a political organization exempt
from taxation under section 527'' after ``509(a)''.
(2) Returns made available by organizations.--
(A) In general.--Paragraph (1)(A)(i) of section 6104(d) of
such Code (relating to public inspection of certain annual
returns, reports, applications for exemption, and notices of
status) is amended by inserting ``or section 6012(a)(6)
(relating to returns by political organizations)'' after
``organizations)''.
(B) Conforming amendments.--
(i) Section 6104(d)(1) of such Code is amended in the
matter preceding subparagraph (A) by inserting ``or an
organization exempt from taxation under section 527(a)''
after ``501(a)''.
(ii) Section 6104(d)(2) of such Code is amended by
inserting ``or section 6012(a)(6)'' after ``section 6033''.
(c) Failure To File Return.--Section 6652(c)(1) of the Internal
Revenue Code of 1986 (relating to annual returns under section 6033) is
amended--
(1) by inserting ``or section 6012(a)(6) (relating to returns
by political organizations)'' after ``organizations)'' in
subparagraph (A)(i);
(2) by inserting ``or section 6012(a)(6)'' after ``section
6033'' in subparagraph (A)(ii);
(3) by inserting ``or section 6012(a)(6)'' after ``section
6033'' in the third sentence of subparagraph (A); and
(4) by inserting ``or 6012(a)(6)'' after ``section 6033'' in
the heading.
(d) Effective Date.--The amendments made by this section shall
apply to returns for taxable years beginning after June 30, 2000.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.

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527 Organization Disclosure bill — HR. 4762

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