DESCRIPTION OF H.R. 5053, 

THE PREVENTING IRS ABUSE AND PROTECTING 

FREE SPEECH ACT 

Scheduled for Markup 

by the 

HOUSE COMMITTEE ON WAYS AND MEANS 

on April 28, 2016 

Prepared by the Staff 

of the 

JOINT COMMITTEE ON TAXATION 

 

April 27, 2016 

JCX-41-16
i 

CONTENTS 

Page

INTRODUCTION .......................................................................................................................... 1

A. Prohibition on Requiring that Identity of Certain Contributors to Section 501(c) 

 Organizations be Included on Annual Returns ................................................................... 2

B. Estimated Revenue Effect of the Proposal .......................................................................... 5
1 

INTRODUCTION 

The House Committee on Ways and Means has scheduled a committee markup of 

H.R. 5053, the Preventing IRS Abuse and Protecting Free Speech Act of 2016, on April 

28, 2016. This document,1

 prepared by the staff of the Joint Committee on Taxation, provides a 

description of the bill. 

 

 1

 This document may be cited as follows: Joint Committee on Taxation, Description of H.R. 5053, the 

Preventing IRS Abuse and Protecting Free Speech Act (JCX-41-16), April 27, 2016. This document can also be 

found on the Joint Committee on Taxation website at www.jct.gov. 
2 

A. Prohibition on Requiring that Identity of Certain Contributors to Section 501(c) 

Organizations be Included on Annual Returns 

Present Law

In general, organizations exempt from taxation under section 501(a) are required to file 

an annual return (Form 990 series), stating specifically the items of gross income, receipts, 

disbursements, and such other information as the Secretary may prescribe.2

 An organization that 

is required to file an information return, but that has gross receipts of less than $200,000 during 

its taxable year, and total assets of less than $500,000 at the end of its taxable year, may file 

Form 990-EZ. Section 501(c)(3) private foundations are required to file Form 990-PF rather 

than Form 990. An organization that has not received a determination of its tax-exempt status, 

but that claims tax-exempt status under section 501(a), is subject to the same annual reporting 

requirements and exceptions as organizations that have received a tax-exemption determination. 

On the applicable annual information return, organizations are required to report their 

gross income, information on their finances, functional expenses, compensation, activities, and 

other information required by the IRS in order to review the organization’s activities and 

operations during the previous taxable year and to review whether the organization continues to 

meet the statutory requirements for exemption. Examples of the information required by Form 

990 include: (1) a statement of program accomplishments; (2) a description of the relationship of 

the organization’s activities to the accomplishment of the organization’s exempt purposes; (3) a 

description of payments to individuals, including compensation to officers and directors, highly 

paid employees and contractors, grants, and certain insider transactions and loans; and (4) 

disclosure of certain activities, such as expenses of conferences and conventions, political 

expenditures, compliance with public inspection requirements, and lobbying activities. 

Form 990-PF requires, among other things, reporting of: the foundation’s gross income 

for the year; expenses attributable to such income; disbursements for exempt purposes; total 

contributions and gifts received and the names of all substantial contributors; names, addresses, 

and compensation of officers and directors; an itemized statement of securities and other assets 

held at the close of the year; an itemized statement of all grants made or approved; and 

information about whether the organization has complied with the restrictions applicable to 

private foundations (secs. 4941 through 4945). 

An organization that files Form 990, Form 990-EZ, or Form 990-PF and receives during 

the year $5,000 or more (in money or property) from any one contributor generally must report 

such contributions on Schedule B (“Schedule of Contributors”).3

 The Schedule B is open to 

public inspection for an organization that files Form 990-PF (private foundations) or a section 

 2

 Sec. 6033(a). 

3

 Certain section 501(c)(3) organizations that meet a 33-1/3-percent public support test of the regulations 

under sections 509(a)(1) and 170(b)(1)(A)(vi) generally must report contributions totaling $5,000 or more from a 

single contributor only to the extent that such contributions exceed two percent of the organization’s total 

contributions. Additional special reporting rules apply to organizations described in sections 501(c)(7), (8), or (10). 
3 

527 political organization that files Form 990 or Form 990-EZ. For all other Form 990 and Form 

990-EZ filers, the names and addresses of contributors are not required to be made available for 

public inspection. All other information, including the amount of contributions, the description 

of noncash contributions, and any other information, is required to be made available for public 

inspection unless it clearly identifies the contributor. As a matter of practice, the IRS does not 

include schedule B on the CD sets or any other form of media made available to the public. 

Instead, on a case-by-case basis, when an individual makes a request for a specific organization’s 

Schedule B, the IRS reviews and redacts the schedule in an effort to avoid divulging information 

that would identify any contributor. 

The requirement that an exempt organization file an annual information return (Form 990 

or Form 990-EZ) does not apply to certain exempt organizations, including organizations (other 

than private foundations) the gross receipts of which in each taxable year normally are not more 

than $50,000. Organizations that are excused from filing an information return by reason of 

normally having gross receipts below such amount must furnish to the Secretary an annual notice 

(Form 990-N), in electronic form, containing certain basic information about the organization.4

Other organizations exempt from the annual information return requirement include: 

churches, their integrated auxiliaries, and conventions or associations of churches; the 

exclusively religious activities of any religious order; certain State institutions whose income is 

excluded from gross income under section 115; an interchurch organization of local units of a 

church; certain mission societies; certain church-affiliated elementary and high schools; and 

certain other organizations, including some that the IRS has relieved from the filing requirement 

pursuant to its statutory discretionary authority.5

Description of Proposal

The proposal limits the contributor information that must be reported by an organization 

described in section 501(c) on its annual information return. Under the proposal, except as 

described below, the Secretary may not require an organization to report the name, address, or 

other identifying information of any contributor to the organization with respect to any 

contribution, grant, bequest, devise, or gift of money or property, regardless of amount. 

The proposal provides two exceptions to this prohibition. First, the Secretary is not 

prohibited from requiring the information described in section 6033(a)(2) relating to prohibited 

tax shelter transactions. Second, the Secretary is not prohibited from continuing to require 

reporting of contributions, grants, bequests, devises, or gifts of money or property in excess of 

$5,000 made by an officer or director of the organization (or an individual having powers to 

responsibilities similar to those of officers or directors) or by a covered employee. Covered 

employee means any employee (including any former employee) of the organization if the 

employee is one of the five highest compensated employees of the organization for the taxable 

year. For this purpose, an employee’s compensation includes compensation from the 

 4

 Sec. 6033(i). 

5

 Sec. 6033(a)(2)(A); Treas. Reg. secs. 1.6033-2(a)(2)(i) and (g)(1). 
4 

organization as well as any compensation paid with respect to the employment of such employee 

by any related person or governmental entity. A person or governmental entity is treated as 

related to the organization if it: (1) controls or is controlled by the organization; (2) is controlled 

by one or more persons that control the organization; (3) is a supported organization (as defined 

in section 509(f)(3) during the taxable year with respect to the organization; (4) is a supporting 

organization described in section 509(a)(3) with respect to the organization; or (5) in the case of 

an organization that is a voluntary employees’ beneficiary association described in section 

501(c)(9), establishes, maintains, or makes contributions to such voluntary employees’ 

beneficiary association. 

The proposal makes a conforming amendment to section 6033(b), which describes certain 

information that a section 501(c)(3) organization must include on its annual information return. 

Effective Date

The proposal is effective for returns required to be filed for taxable years ending after the 

date of enactment. 
5 

B. Estimated Revenue Effect of the Proposal 

Fiscal Years 

[Millions of Dollars] 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016-21 2016-26

 

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NOTE: Details do not add to totals due to rounding.