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