[Congressional Record Volume 164, Number 62 (Tuesday, April 17, 2018)]
[House]
[Pages H3371-H3372]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 REQUIRING ELECTRONIC FILING OF ANNUAL RETURNS OF EXEMPT ORGANIZATIONS

  Mr. KELLY of Pennsylvania. Mr. Speaker, I move to suspend the rules 
and pass the bill (H.R. 5443) to amend the Internal Revenue Code of 
1986 to require electronic filing of the annual returns of exempt 
organizations and provide for making such returns available for public 
inspection, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 5443

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

     SECTION 1. MANDATORY ELECTRONIC FILING FOR ANNUAL RETURNS OF 
                   EXEMPT ORGANIZATIONS.

       (a) In General.--Section 6033 of the Internal Revenue Code 
     of 1986 is amended by redesignating subsection (n) as 
     subsection (o) and by inserting after subsection (m) the 
     following new subsection:
       ``(n) Mandatory Electronic Filing.--Any organization 
     required to file a return under this section shall file such 
     return in electronic form.''.
       (b) Inspection of Electronically Filed Annual Returns.--
     Section 6104(b) of such Code is amended by adding at the end 
     the following: ``Any annual return required to be filed 
     electronically under section 6033(n) shall be made available 
     by the Secretary to the public in machine readable format.''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to returns filed 
     for taxable years beginning after the date of the enactment 
     of this Act.
       (2) Transitional relief.--
       (A) Small organizations.--
       (i) In general.--In the case of any small organizations, or 
     any other organizations for which the Secretary of the 
     Treasury or the Secretary's delegate (hereafter referred to 
     in this paragraph as the ``Secretary'') determines the 
     application of the amendments made by subsection (a) would 
     cause undue burden without a delay, the Secretary may delay 
     the application of such amendments, but not later than 
     taxable years beginning 2 years after the date of the 
     enactment of this Act.
       (ii) Small organization.--For purposes of clause (i), the 
     term ``small organization'' means any organization--

       (I) the gross receipts of which for the taxable year are 
     less than $200,000, and
       (II) the aggregate gross assets of which at the end of the 
     taxable year are less than $500,000.

       (B) Organizations filing form 990-T.--In the case of any 
     organization described in section 511(a)(2) of the Internal 
     Revenue Code of 1986 which is subject to the tax imposed by 
     section 511(a)(1) of such Code on its unrelated business 
     taxable income, or any organization required to file a return 
     under section 6033 of such Code and include information under 
     subsection (e) thereof, the Secretary may delay the 
     application of the amendments made by this section, but not 
     later than taxable years beginning 2 years after the date of 
     the enactment of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Pennsylvania (Mr. Kelly) and the gentleman from Georgia (Mr. Lewis) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Pennsylvania.


                             General Leave

  Mr. KELLY of Pennsylvania. Mr. Speaker, I ask unanimous consent that 
all Members may have 5 legislative days within which to revise and 
extend their remarks and to include extraneous material on H.R. 5443, 
currently under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Pennsylvania?
  There was no objection.
  Mr. KELLY of Pennsylvania. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, I rise today in strong support of H.R. 5443. This bill, 
in short, would ensure that all nonprofits file their tax forms 
electronically so that the charitable community can better assist those 
in need.
  First, I want to thank Congresswoman Stephanie Murphy today for 
cosponsoring this important legislation with me.
  This provision is identical to one that my colleague on the Ways and 
Means Committee, Congressman Blumenauer, and I introduced in a larger 
tax package, the CHARITY Act, along with Senators Thune and Casey on 
the Senate Finance Committee in 2017.

                              {time}  1430

  Before I discuss this bill in greater detail, I want to look across 
the room to my great friend, Mr.  John Lewis. It was in 2015 that Mr. 
Lewis and I crossed the Edmund Pettus Bridge. It was at that time that 
Mr. Lewis stopped and spent some time with my grandson George. And as 
we were walking across the bridge, George, who was 8 at the time, said: 
``Grandpa, we are actually going to do this. We are going to go across 
the Edmund Pettus Bridge with Mr. Lewis.''
  I said: ``That's right, George, we are.''
  He said: ``Well, Grandpa, this is the 50th anniversary.''
  I said: ``Yes, George, it is.''
  He said: ``Well, can we come back for the 100th anniversary?''
  I said: ``George, we will do that together. You and I will come 
across the bridge at the 100th anniversary.''
  He said: ``Grandpa, how old are you right now?''
  I said: ``Well, George, I am 65.''
  He said: ``Grandpa, it may be hard for you to get across that 
bridge.''
  I said: ``Georgie, don't worry. If I can't walk, you can push me 
across.''
  That was a great weekend for George. And for Mr. Lewis, I have always 
felt he is such an iconic figure in this House for people who stood up 
for civil rights. That weekend was one of the most gracious weekends 
and best weekends with my son my grandson had. So I can't tell you how 
much I appreciate being with you on the floor today.
  When it comes to charity, the American people are truly unique. In 
fact, Americans are the most generous in the world according to the new 
Almanac of American Philanthropy. In a first-of-its-kind survey, the 
almanac found that Americans out-donate Britain and Canada 2-to-1 and 
nations like Italy and Germany 20-to-1. What is more, more than half of 
almost every single income level in America donates to charity. That is 
remarkable, and it makes me proud to be an American and proud of our 
Nation's history of philanthropy.
  In its earliest form, the word ``philanthropy'' comes from the Greek 
term ``philanthropia,'' which simply meant ``love of mankind.'' The 
meaning has evolved over time, but, from the earliest days of human 
civilization, we have depended upon kindness directed towards strangers 
and others. We define ``philanthropy'' today as the practice of 
organized, systematic giving to improve the quality of human life 
through the promotion of welfare and social change.
  Throughout every age, American philanthropists have demonstrated the 
power of giving to create great and meaningful change. In my own 
congressional district in western Pennsylvania, we have many wonderful 
organizations that demonstrate the power of giving each and every day. 
In Erie, Pennsylvania, we have The Erie Community Foundation, the 
United Way of Erie, and the Black Family Foundation.
  As a businessman and leader in the energy sector, Pat Black and his 
family started a small, private foundation in 1993. Here is one 
individual who took it upon himself to create a charitable organization 
to give back to his community. And we have many other good corporate 
citizens in Erie, as well, such as Erie Insurance. More than half a 
century ago, Erie Insurance's founder, H.O. Hirt, had a lifelong 
concern for others who were less fortunate, and

[[Page H3372]]

today Erie Insurance and its employees follow Mr. Hirt's example and 
continue this tradition of giving of food and clothing and other drives 
that help out in the community.
  And since it is tax filing week, all these charitable organizations 
must file their tax forms, called 990s, which brings us back to why we 
are here today on the floor considering H.R. 5443. Our bill would make 
it mandatory that 990s be filed electronically going forward. 
Electronic filing, or e-filing, is not only more efficient; it costs 
taxpayers less and the IRS less to administer. This requirement will 
boost transparency in the tax-exempt sector by requiring all nonprofits 
to file their returns electronically.
  Today, approximately 60 percent of all 990s are filed electronically, 
but the remaining 40 percent are still paper filed and not released as 
open data. In addition to requiring e-filing of the 990 form be 
mandatory for tax-exempt organizations, the bill would make such 
returns available to the public in a machine-readable format.
  So why is this important? Better 990 information, when searchable and 
available to the public, allows for better scrutiny and better 
transparency. Jacob Harold, president of GuideStar, which collects and 
disseminates information from nonprofits' returns, says: ``The more 
easily people can access that data, the better.''
  A readable, searchable format that will help improve efficiency and 
accuracy and reduce fraud, e-filing has served as a highly effective 
tool in exposing scam charities, and it will make it easier to catch 
these few bad actors who are using tax donations for personal gain 
only.
  For example, in 2015, the Federal Trade Commission, the District of 
Columbia, and all 50 States filed a lawsuit against four scam cancer 
charities calling themselves the Cancer Fund. Their owners had used 
over 95 percent of the $187 million in charitable donations for their 
own personal benefit. This lawsuit took almost 4 years because of the 
difficulty of analyzing thousands and thousands of pages of data that 
were filed on paper.
  Our bill will correct that. Hundreds of millions of dollars from 
generous Americans were wasted because their donations were going to a 
fraudster and not helping researchers to find a cure for cancer. To 
take money away from cancer patients is just plain wrong and immoral. 
Our bill wants to make sure this doesn't happen in the future.
  Now, how would that happen? Changes could be brought sooner against 
these scam charities, in less than 1 year instead of 4, if the return 
information had been available electronically. There are countless 
examples that prove that this can be the case. The State of Michigan is 
a great model for just how valuable access to machine-readable data is. 
To date, Michigan has shut down the most number of scam nonprofits out 
of all 50 States. This is because of the Michigan attorney general's 
ability to manipulate and analyze researchable data.

  This bipartisan bill would help expose these shams nationally by 
ensuring nonprofits are e-filing annual returns. Therefore, I urge my 
colleagues on both sides to support this important good-government, 
antifraud bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LEWIS of Georgia. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, let me just thank my friend and colleague from 
Pennsylvania for those kind words. Say hello to your grandson George.
  Mr. Speaker, I rise in strong support of H.R. 5443. Let me begin by 
thanking the gentleman from Pennsylvania and the gentlewoman from 
Florida for their work on this good and necessary bill.
  Mr. Speaker, I hope all of our colleagues will support this simple 
bill, and I reserve the balance of my time.
  Mr. KELLY of Pennsylvania. Mr. Speaker, having no other speakers, I 
reserve the balance of my time.
  Mr. LEWIS of Georgia. Mr. Speaker, I yield 3 minutes to the 
gentlewoman from Florida (Mrs. Murphy), the lead Democratic cosponsor.
  Mrs. MURPHY of Florida. Mr. Speaker, I am proud to be the lead 
Democrat on this bipartisan bill which would provide government 
officials with the timely information they need to prevent and punish 
fraud in connection with charitable solicitations and the use of 
charitable assets.
  I want to thank my colleague and colead from Pennsylvania, 
Congressman  Mike Kelly, for his leadership on this issue. I also want 
to thank the chairman, ranking member, and the members of the Ways and 
Means Committee which unanimously approved this bill last week.
  Our bill would require charities to annually file Internal Revenue 
Service form 990, the form used by tax-exempt organizations, in 
electronic as opposed to paper format. It would also require the IRS to 
make these electronic filings available to the public in machine-
readable format. Our legislation has been endorsed by the National 
Association of State Charity Officials, or NASCO, which is an 
association of State agencies that oversees charitable organizations.
  The purpose of our bill is threefold:
  First, it would help law enforcement agencies and government 
regulators identify, shut down, and prosecute fraudulent charitable 
organizations that use financial contributions for their personal 
benefit rather than to help those in need.
  Second, it would protect American taxpayers who make generous 
donations to charitable organizations and deserve to feel a sense of 
security that their hard-earned money is being used for its intended 
purpose.
  And third, it would help reduce the often excessive and overlapping 
Federal and State filing requirements applicable to charitable 
organizations, on which these organizations spend considerable time, 
money, and resources complying every year. This would enable genuine 
tax-exempt organizations to focus more on their charitable mission, 
whether that is helping wounded warriors, sponsoring cancer research, 
assisting victims of gun violence, or other notable causes.
  I would note that, in its letter of support for this legislation, 
NASCO states that having electronic data for all form 990 filers, as 
this bill mandates, would ensure that the States have the ability to 
identify and stop fraudulent activity that harms charities and donors 
more quickly and effectively. NASCO further states that the bill could 
result in returning to charitable organizations significant resources 
that these organizations must currently devote to compliance with 
unnecessary government filing requirements.
  In closing, I respectfully ask my colleagues in this Chamber to 
support the bill, and I urge my colleagues in the Senate to quickly 
follow suit.
  Mr. KELLY of Pennsylvania. Mr. Speaker, I reserve the balance of my 
time.
  Mr. LEWIS of Georgia. Mr. Speaker, I have no further speakers and am 
prepared to close.
  Mr. Speaker, I urge all of my colleagues to support this bill, and I 
yield back the balance of my time.
  Mr. KELLY of Pennsylvania. Mr. Speaker, in closing, I yield myself 
such time as I may consume.
  Yes, it is true, Americans are a charitable group. In fact, we are 
the most generous people in the world. Our Nation's history of 
philanthropy, charities, and loving people are the envy of the world. 
In 2016 alone, Americans gave $390 billion, with 63 million Americans, 
25 percent of the adult population, volunteering their time, their 
talent, their energy, and their dollars to make a difference.
  As a recent commentator noted, Americans have it in their DNA to be 
philanthropic. Of all the countries, we are the most generous. Because 
I know my colleagues have it in their DNA to support our Nation's 
unique philanthropic history and charitable community, I urge them to 
vote in favor of this important legislation.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Pennsylvania (Mr. Kelly) that the House suspend the 
rules and pass the bill, H.R. 5443, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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