[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3520 Introduced in House (IH)]

113th CONGRESS
  1st Session
                                H. R. 3520

To amend the Internal Revenue Code of 1986 to reform rules relating to 
 501(c)(4) organizations and provide certain taxpayer protections, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 18, 2013

 Mr. Boustany introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to reform rules relating to 
 501(c)(4) organizations and provide certain taxpayer protections, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Exempt Organization Simplification 
and Taxpayer Protection Act of 2013''.

SEC. 2. ORGANIZATIONS REQUIRED TO NOTIFY SECRETARY OF INTENT TO OPERATE 
              AS 501(C)(4).

    (a) In General.--Part I of subchapter F of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 506. ORGANIZATIONS REQUIRED TO NOTIFY SECRETARY OF INTENT TO 
              OPERATE AS 501(C)(4).

    ``(a) In General.--An organization described in section 501(c)(4) 
shall, not later than 60 days after the organization is established, 
notify the Secretary (in such manner as the Secretary shall by 
regulation prescribe) that it is operating as such.
    ``(b) Contents of Notice.--The notice required under subsection (a) 
shall include the following information:
            ``(1) The name, address, and taxpayer identification number 
        of the organization.
            ``(2) The date on which, and the State under the laws of 
        which, the organization was organized.
            ``(3) A statement of the purpose of the organization.
    ``(c) Acknowledgment of Receipt.--Not later than 60 days after 
receipt of such a notice, the Secretary shall send to the organization 
an acknowledgment of such receipt.
    ``(d) Extension for Reasonable Cause.--The Secretary may, for 
reasonable cause, extend the 60-day period described in subsection (a).
    ``(e) User Fee.--The Secretary shall impose a reasonable user fee 
for submission of the notice under subsection (a).
    ``(f) Request for Determination.--Upon request by an organization 
to be treated as an organization described in section 501(c)(4), the 
Secretary may issue a determination with respect to such treatment. 
Such request shall be treated for purposes of section 6104 as an 
application for exemption from taxation under section 501(a).''.
    (b) Supporting Information With First Return.--Paragraph (1) of 
section 6033(f) of such Code is amended--
            (1) by striking the period at the end and inserting ``, 
        and'',
            (2) by striking ``include on the return required under 
        subsection (a) the information'' and inserting the following: 
        ``include on the return required under subsection (a)--
            ``(1) the information'', and
            (3) by adding at the end the following new paragraph:
            ``(2) in the case of the first such return filed by such an 
        organization after submitting a notice to the Secretary under 
        section 506(a), such information as the Secretary shall by 
        regulation require in support of the organization's treatment 
        as an organization described in section 501(c)(4).''.
    (c) Failure To File Initial Notification.--Subsection (c) of 
section 6652 of such Code is amended by redesignating paragraphs (4) 
and (5) as paragraphs (5) and (6), respectively, and by inserting after 
paragraph (3) the following new paragraph:
            ``(4) Notices under section 506.--
                    ``(A) Penalty on organization.--In the case of a 
                failure to submit a notice required under section 
                506(a) (relating to organizations required to notify 
                Secretary of intent to operate as 501(c)(4)) on the 
                date and in the manner prescribed therefor, there shall 
                be paid by the organization failing to so submit $20 
                for each day during which such failure continues, but 
                the total amount imposed under this subparagraph on any 
                organization for failure to submit any one notice shall 
                not exceed $5,000.
                    ``(B) Managers.--The Secretary may make written 
                demand on an organization subject to penalty under 
                subparagraph (A) specifying in such demand a reasonable 
                future date by which the notice shall be submitted for 
                purposes of this subparagraph. If such notice is not 
                submitted on or before such date, there shall be paid 
                by the person failing to so submit $20 for each day 
                after the expiration of the time specified in the 
                written demand during which such failure continues, but 
                the total amount imposed under this subparagraph on all 
                persons for failure to submit any one notice shall not 
                exceed $5,000.''.
    (d) Clerical Amendment.--The table of sections for part I of 
subchapter F of chapter 1 of such Code is amended by adding at the end 
the following new item:

``Sec. 506. Organizations required to notify Secretary of intent to 
                            operate as 501(c)(4).''.
    (e) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to organizations which are described in section 501(c)(4) 
        of the Internal Revenue Code of 1986 and organized after 
        December 31, 2014.
            (2) Certain existing organizations.--In the case of any 
        other organization described in section 501(c)(4) of such Code, 
        the amendments made by this section shall apply to such 
        organization only if, on or before the date of the enactment of 
        this Act--
                    (A) such organization has not applied for a written 
                determination of recognition as an organization 
                described in section 501(c)(4) of such Code, and
                    (B) such organization has not filed at least one 
                annual return or notice required under subsection 
                (a)(1) or (i) (as the case may be) of section 6033 of 
                such Code.
        In the case of any organization to which the amendments made by 
        this section apply by reason of the preceding sentence, such 
        organization shall submit the notice required by section 506(a) 
        of such Code, as added by this Act, not later than 180 days 
        after the date of the enactment of this Act.

SEC. 3. DECLARATORY JUDGMENTS FOR 501(C)(4) ORGANIZATIONS.

    (a) In General.--Paragraph (1) of section 7428(a) of the Internal 
Revenue Code of 1986 is amended by striking ``or'' at the end of 
subparagraph (C) and by inserting after subparagraph (D) the following 
new subparagraph:
                    ``(E) with respect to the initial classification or 
                continuing classification of an organization described 
                in section 501(c)(4) which is exempt from tax under 
                section 501(a), or''.
    (b) Effective Date.--The amendments made by this section shall 
apply to pleadings filed after the date of the enactment of this Act.

SEC. 4. RELEASE OF INFORMATION REGARDING THE STATUS OF CERTAIN 
              INVESTIGATIONS.

    (a) In General.--Subsection (e) of section 6103 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(11) Disclosure of information regarding status of 
        investigation of violation of this section.--In the case of a 
        person who provides to the Secretary information indicating a 
        violation of section 7213, 7213A, or 7214 with respect to any 
        return or return information of such person, the Secretary may 
        disclose to such person (or such person's designee)--
                    ``(A) whether an investigation based on the 
                person's provision of such information has been 
                initiated and whether it is open or closed,
                    ``(B) whether any such investigation substantiated 
                such a violation by any individual, and
                    ``(C) whether any action has been taken with 
                respect to such individual (including whether a 
                referral has been made for prosecution of such 
                individual).''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 5. REVIEW OF INTERNAL REVENUE SERVICE EXAMINATION SELECTION 
              PROCEDURES.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study of each Internal Revenue Service operating division to 
assess the process used for determining how enforcement cases are 
selected and processed. Such study shall include a review of the 
following:
            (1) The standards each such operating division has 
        established for enforcement case selection (including any 
        automated or discretionary selection processes) and case work, 
        and whether such standards meet the objectives of impartiality, 
        objectivity, compliance, and minimizing taxpayer burden.
            (2) The extent to which any cases are initiated by 
        referrals or complaints from inside or outside of the operating 
        division (including from outside of the Internal Revenue 
        Service).
            (3) The Internal Revenue Service controls (including 
        management reviews and regular updates) for assuring that its 
        standards for enforcement cases (and handling of referrals and 
        complaints) in each operating division are sufficient for 
        achieving the objectives described in paragraph (1).
            (4) The Internal Revenue Service controls (including 
        training, monitoring, and quality assessments) for assuring 
        that its standards are adhered to by all division personnel and 
        the effectiveness of such controls.
            (5) Whether the existing standards and controls provide 
        reasonable assurance that each division's enforcement processes 
        meet the Internal Revenue Service objectives of impartiality, 
        objectivity, compliance, and minimizing taxpayer burden.
    (b) Initial Report.--Not later than 1 year after the date of the 
enactment of this section, the Comptroller General shall submit to the 
Committee on Ways and Means of the House of Representatives, the 
Committee on Finance of the Senate, and the Secretary of the Treasury a 
report on the results of such study. Such report shall include such 
recommendations as the Comptroller General may deem advisable.
    (c) Follow-Up on Recommendations.--Not later than 180 days after a 
report is submitted with respect to an operating division under 
subsection (b), the Comptroller General shall conduct a follow-up 
study, and submit to the Committee on Ways and Means of the House of 
Representatives, the Committee on Finance of the Senate, and the 
Secretary of the Treasury a report, on whether any recommendations to 
improve case selection and case work processes have been implemented 
and are working as intended.
    (d) Continuing Case Management Studies and Reports.--
            (1) In general.--After a report is submitted under 
        subsection (b), the Comptroller General shall conduct follow-up 
        studies and reports in the same manner as provided in 
        subsections (a) and (b) with respect to each operating division 
        of the Internal Revenue Service and shall include in such study 
        and report a review of whether any previous recommendations to 
        improve case selection and case work processes have been 
        implemented and are working as intended.
            (2) Frequency.--Each such report with respect to an 
        operating division shall be submitted not later than 4 years 
        after the date the most recent report was submitted with 
        respect to such operating division under subsection (b) or this 
        subsection. The Comptroller General shall submit no fewer than 
        1 such report each year.

SEC. 6. IRS EMPLOYEES PROHIBITED FROM USING PERSONAL EMAIL ACCOUNTS FOR 
              OFFICIAL BUSINESS.

    No officer or employee of the Internal Revenue Service may use a 
personal email account to conduct any official business of the 
Government.
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