[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1295 Introduced in House (IH)]

114th CONGRESS
  1st Session
                                H. R. 1295

 To amend the Internal Revenue Code of 1986 to improve the process for 
making determinations with respect to whether organizations are exempt 
          from taxation under section 501(c)(4) of such Code.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 4, 2015

Mr. Holding (for himself and Mr. Roskam) 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 improve the process for 
making determinations with respect to whether organizations are exempt 
          from taxation under section 501(c)(4) of such Code.

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

SECTION 1. 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.--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.--Section 6652(c) 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 the 
        date of the enactment of this Act.
            (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. 2. DECLARATORY JUDGMENTS FOR 501(C)(4) ORGANIZATIONS.

    (a) In General.--Section 7428(a)(1) of such Code 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.
                                 <all>