[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2583 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2583

 To amend the Internal Revenue Code of 1986 to increase disclosure for 
   certain political organizations exempt from tax under section 527.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 17, 2000

  Mr. Lieberman (for himself, Mr. Levin, Mr. Daschle, Mr. McCain, Mr. 
    Jeffords, Mr. Feingold, Mr. Durbin, Mr. Cleland, Mr. Kerry, Mr. 
   Torricelli, Mr. Kennedy, Mr. Akaka, and Mr. Bryan) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to increase disclosure for 
   certain political organizations exempt from tax under section 527.

    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) Denial of exemption.--An organization shall not be 
        treated as an organization described in this section unless it 
        makes the required disclosures under paragraph (2).
            ``(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, include the occupation and name of 
                employer of such individual).
                    ``(B) The name and address (in the case of an 
                individual, include 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(c)(6) (relating to 
        returns by political organizations)'' after ``organizations)'' 
        in subparagraph (A)(i),
            (2) by inserting ``or section 6012(c)(6)'' after ``section 
        6033'' in subparagraph (A)(ii),
            (3) by inserting ``or section 6012(c)(6)'' after ``section 
        6033'' in the third sentence of subparagraph (A), and
            (4) by inserting ``or 6012(c)(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.
                                 <all>