[106th Congress Public Law 230]
[From the U.S. Government Printing Office]


<DOC>
[DOCID: f:publ230.106]


[[Page 114 STAT. 477]]

Public Law 106-230
106th Congress

                                 An Act


 
To amend the Internal Revenue Code of 1986 to require 527 organizations 
 to disclose their political activities. <<NOTE: July 1, 2000 -  [H.R. 
                                4762]>> 

    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) <<NOTE: 26 USC 527.>> 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 <<NOTE: Deadline.>> 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--

[[Page 114 STAT. 478]]

                    ``(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 <<NOTE: 26 USC 
                6104.>> (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 <<NOTE: Public 
        information. Records.>> 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 <<NOTE: Deadline.>> 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--

[[Page 114 STAT. 479]]

                    (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 <<NOTE: 26 USC 6652.>> (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 <<NOTE: 26 USC 527 note.>> 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 <<NOTE: Deadline.>> 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 <<NOTE: 26 USC 527.>> (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 <<NOTE: Reports. Effective 
        dates. Deadlines.>> 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--

[[Page 114 STAT. 480]]

                          ``(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 fifteenth 
                      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 twelfth day before (or 
                      posted by registered or certified mail not later 
                      than the fifteenth day before) any election with 
                      respect to which the organization makes a 
                      contribution or expenditure, and which shall be 
                      complete as of the twentieth day before the 
                      election, and
                          ``(III) a post-general election report, which 
                      shall be filed not later than the thirtieth day 
                      after the general election and which shall be 
                      complete as of the twentieth 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 twentieth 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

[[Page 114 STAT. 481]]

        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 <<NOTE: 26 USC 6104.>> (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.''.

[[Page 114 STAT. 482]]

    (c) Failure To Make Public.--Section 6652(c)(1)(C) of the Internal 
Revenue Code of 1986 <<NOTE: 26 USC 6652.>> (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 <<NOTE: Applicability. 26 USC 527 note.>> Date.--The 
amendment made by subsection (a) shall apply to expenditures made and 
contributions received after the date of the 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 <<NOTE: 26 USC 
        6012.>> (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 <<NOTE: 26 USC 6033.>> (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 <<NOTE: 26 USC 6104.>> (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)

[[Page 114 STAT. 483]]

                (relating to returns by political organizations)'' after 
                ``organizations)''.
                    (B) Conforming amendments.--
                          (i) Section 6104(d)(1) of such Code <<NOTE: 26 
                      USC 6104.>> 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 <<NOTE: 26 USC 6652.>> (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 <<NOTE: Applicability. 26 USC 6012 note.>> Date.--The 
amendments made by this section shall apply to returns for taxable years 
beginning after June 30, 2000.

    Approved July 1, 2000.

LEGISLATIVE HISTORY--H.R. 4762 (S. 2742):
---------------------------------------------------------------------------

CONGRESSIONAL RECORD, Vol. 146 (2000):
            June 27, considered and passed House.
            June 28, 29, considered and passed Senate.

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