[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4762 Introduced in House (IH)]
106th CONGRESS
2d Session
H. R. 4762
To amend the Internal Revenue Code of 1986 to require 527 organizations
to disclose their political activities.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 27, 2000
Mr. Houghton introduced the following bill; which was referred to the
Committee on Ways and Means
June 27, 2000
Committee on Ways and Means discharged; considered under suspension of
the rules and passed
_______________________________________________________________________
A BILL
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,
SECTION 1. REQUIRED NOTIFICATION OF SECTION 527 STATUS.
(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.
SEC. 2. DISCLOSURES BY POLITICAL ORGANIZATIONS.
(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
15th 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 12th day before (or
posted by registered or certified mail not
later than the 15th day before) any election
with respect to which the organization makes a
contribution or expenditure, and which shall be
complete as of the 20th day before the
election, and
``(III) a post-general election report,
which shall be filed not later than the 30th
day after the general election and which shall
be complete as of the 20th 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 20th 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
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.
SEC. 3. RETURN REQUIREMENTS RELATING TO SECTION 527 ORGANIZATIONS.
(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.
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