PUBLIC LAW 106–230—JULY 1, 2000 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.

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) 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 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—

Deadline.

26 USC 527.

July 1, 2000

[H.R. 4762]

114 STAT. 478 PUBLIC LAW 106–230—JULY 1, 2000

‘‘(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 (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 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 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—

Deadline.

Public

information.

Records.

26 USC 6104.

PUBLIC LAW 106–230—JULY 1, 2000 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 (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 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 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 (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 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—

Reports.

Effective dates.

Deadlines.

26 USC 527.

Deadline.

26 USC 527 note.

26 USC 6652.

114 STAT. 480 PUBLIC LAW 106–230—JULY 1, 2000

‘‘(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

PUBLIC LAW 106–230—JULY 1, 2000 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 (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.’’.

26 USC 6104.

114 STAT. 482 PUBLIC LAW 106–230—JULY 1, 2000

(c) FAILURE TO MAKE PUBLIC.—Section 6652(c)(1)(C) of the

Internal Revenue Code of 1986 (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 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 (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 (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 (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)

26 USC 6104.

26 USC 6033.

26 USC 6012.

Applicability.

26 USC 527 note.

26 USC 6652.

PUBLIC LAW 106–230—JULY 1, 2000 114 STAT. 483

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.

Æ

(relating to returns by political organizations)’’ after

‘‘organizations)’’.

(B) CONFORMING AMENDMENTS.— (i) Section 6104(d)(1) of such Code 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 (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 DATE.—The amendments made by this section

shall apply to returns for taxable years beginning after June 30,

2000.

Approved July 1, 2000.

Applicability.

26 USC 6012

note.

26 USC 6652.

26 USC 6104.