PUBLIC LAW 107–276—NOV. 2, 2002 116 STAT. 1929

Public Law 107–276

107th Congress

An Act

To amend section 527 of the Internal Revenue Code of 1986 to eliminate notification

and return requirements for State and local party committees and candidate

committees and avoid duplicate reporting by certain State and local political

committees of information required to be reported and made publicly available

under State law, and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. EXEMPTION FOR CERTAIN STATE AND LOCAL POLITICAL

COMMITTEES FROM NOTIFICATION REQUIREMENTS.

(a) EXEMPTION FROM NOTIFICATION REQUIREMENTS.—Paragraph (5) of section 527(i) of the Internal Revenue Code of 1986

(relating to organizations must notify Secretary that they are section 527 organizations) is amended by striking ‘‘or’’ at the end

of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting ‘‘, or’’, and by adding at the end the

following:

‘‘(C) which is a political committee of a State or local

candidate or which is a State or local committee of a

political party.’’.

(b) EFFECTIVE DATE.—The amendments made by subsection

(a) shall take effect as if included in the amendments made by

Public Law 106–230.

SEC. 2. EXEMPTION FOR CERTAIN STATE AND LOCAL POLITICAL

COMMITTEES FROM REPORTING REQUIREMENTS.

(a) IN GENERAL.—Section 527(j)(5) of the Internal Revenue

Code of 1986 (relating to coordination with other requirements)

is amended by redesignating subparagraphs (C), (D), and (E) as

subparagraphs (D), (E), and (F), respectively, and by inserting after

subparagraph (B) the following new subparagraph:

‘‘(C) to any organization which is a qualified State

or local political organization,’’.

(b) QUALIFIED STATE OR LOCAL POLITICAL ORGANIZATION.—

Subsection (e) of section 527 of the Internal Revenue Code of 1986

(relating to other definitions) is amended by adding at the end

the following new paragraph:

‘‘(5) QUALIFIED STATE OR LOCAL POLITICAL ORGANIZATION.—

‘‘(A) IN GENERAL.—The term ‘qualified State or local

political organization’ means a political organization—

‘‘(i) all the exempt functions of which are solely

for the purposes of influencing or attempting to influence the selection, nomination, election, or appointment

26 USC 527 note.

26 USC 527.

Nov. 2, 2002

[H.R. 5596]

116 STAT. 1930 PUBLIC LAW 107–276—NOV. 2, 2002

of any individual to any State or local public office

or office in a State or local political organization, ‘‘(ii) which is subject to State law that requires

the organization to report (and it so reports)—

‘‘(I) information regarding each separate

expenditure from and contribution to such

organization, and

‘‘(II) information regarding the person who

makes such contribution or receives such expenditure,

which would otherwise be required to be reported

under this section, and

‘‘(iii) with respect to which the reports referred

to in clause (ii) are (I) made public by the agency

with which such reports are filed, and (II) made publicly available for inspection by the organization in

the manner described in section 6104(d).

‘‘(B) CERTAIN STATE LAW DIFFERENCES DISREGARDED.—

An organization shall not be treated as failing to meet

the requirements of subparagraph (A)(ii) solely by reason

of 1 or more of the following:

‘‘(i) The minimum amount of any expenditure or

contribution required to be reported under State law

is not more than $300 greater than the minimum

amount required to be reported under subsection (j).

‘‘(ii) The State law does not require the organization to identify 1 or more of the following:

‘‘(I) The employer of any person who makes

contributions to the organization.

‘‘(II) The occupation of any person who makes

contributions to the organization.

‘‘(III) The employer of any person who receives

expenditures from the organization.

‘‘(IV) The occupation of any person who

receives expenditures from the organization. ‘‘(V) The purpose of any expenditure of the

organization.

‘‘(VI) The date any contribution was made to

the organization.

‘‘(VII) The date of any expenditure of the

organization.

‘‘(C) DE MINIMIS ERRORS.—An organization shall not

fail to be treated as a qualified State or local political

organization solely because such organization makes de

minimis errors in complying with the State reporting

requirements and the public inspection requirements

described in subparagraph (A) as long as the organization

corrects such errors within a reasonable period after the

organization becomes aware of such errors.

‘‘(D) PARTICIPATION OF FEDERAL CANDIDATE OR OFFICE

HOLDER.—The term ‘qualified State or local political

organization’ shall not include any organization otherwise

described in subparagraph (A) if a candidate for nomination

or election to Federal elective public office or an individual

who holds such office—

‘‘(i) controls or materially participates in the direction of the organization,

PUBLIC LAW 107–276—NOV. 2, 2002 116 STAT. 1931

‘‘(ii) solicits contributions to the organization

(unless the Secretary determines that such solicitations

resulted in de minimis contributions and were made

without the prior knowledge and consent, whether

explicit or implicit, of the organization or its officers,

directors, agents, or employees), or

‘‘(iii) directs, in whole or in part, disbursements

by the organization.’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall take effect as if included in the amendments made by Public

Law 106–230.

SEC. 3. EXEMPTION FROM ANNUAL RETURN REQUIREMENTS.

(a) INCOME TAX RETURNS REQUIRED ONLY FOR POLITICAL

ORGANIZATION TAXABLE INCOME.—Paragraph (6) of section 6012(a)

of the Internal Revenue Code of 1986 (relating to persons required

to make returns of income) is amended by striking ‘‘or which has’’ and all that follows through ‘‘section)’’. (b) INCOME TAX RETURNS NOT SUBJECT TO DISCLOSURE.—

(1) DISCLOSURE BY THE SECRETARY.—Subsection (b) of section 6104 of such Code (relating to disclosure by the Secretary

of annual information returns) is amended by striking

‘‘6012(a)(6),’’.

(2) PUBLIC INSPECTION.—Subsection (d) of section 6104 of

such Code (relating to public inspection of certain annual

returns) is amended—

(A) in paragraph (1)(A)(i) by striking ‘‘or section

6012(a)(6) (relating to returns by political organizations)’’,

and

(B) in subparagraph (2) by striking ‘‘or section

6012(a)(6)’’.

(c) INFORMATION RETURNS.—Subsection (g) of section 6033 of

such Code (relating to returns required by political organizations)

is amended to read as follows:

‘‘(g) RETURNS REQUIRED BY POLITICAL ORGANIZATIONS.— ‘‘(1) IN GENERAL.—This section shall apply to a political

organization (as defined by section 527(e)(1)) which has gross

receipts of $25,000 or more for the taxable year. In the case

of a political organization which is a qualified State or local

political organization (as defined in section 527(e)(5)), the preceding sentence shall be applied by substituting ‘$100,000’ for

‘$25,000’.

‘‘(2) ANNUAL RETURNS.—Political organizations described

in paragraph (1) shall file an annual 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), with such modifications as the Secretary considers

appropriate to require only information which is necessary

for the purposes of carrying out section 527, and

‘‘(B) containing such other information as the Secretary

deems necessary to carry out the provisions of this subsection.

‘‘(3) MANDATORY EXCEPTIONS FROM FILING.—Paragraph (2)

shall not apply to an organization—

‘‘(A) which is a State or local committee of a political

party, or political committee of a State or local candidate,

Applicability.

26 USC 6033.

26 USC 6104.

26 USC 6012.

26 USC 527 note.

116 STAT. 1932 PUBLIC LAW 107–276—NOV. 2, 2002

‘‘(B) which is a caucus or association of State or local

officials, ‘‘(C) which is an authorized committee (as defined in

section 301(6) of the Federal Election Campaign Act of

1971) of a candidate for Federal office, ‘‘(D) which is a national committee (as defined in section 301(14) of the Federal Election Campaign Act of 1971)

of a political party, ‘‘(E) which is a United States House of Representatives

or United States Senate campaign committee of a political

party committee, ‘‘(F) which is required to report under the Federal

Election Campaign Act of 1971 as a political committee

(as defined in section 301(4) of such Act), or ‘‘(G) to which section 527 applies for the taxable year

solely by reason of subsection (f)(1) of such section.

‘‘(4) DISCRETIONARY EXCEPTION.—The Secretary may relieve

any organization required under paragraph (2) to file an

information return from filing such a return if the Secretary

determines that such filing is not necessary to the efficient

administration of the internal revenue laws.’’. (d) EFFECTIVE DATE.—The amendments made by this section

shall take effect as if included in the amendments made by Public

Law 106–230.

SEC. 4. NOTIFICATION OF INTERACTION OF REPORTING REQUIREMENTS.

(a) IN GENERAL.—The Secretary of the Treasury, in consultation

with the Federal Election Commission, shall publicize— (1) the effect of the amendments made by this Act, and

(2) the interaction of requirements to file a notification

or report under section 527 of the Internal Revenue Code

of 1986 and reports under the Federal Election Campaign Act

of 1971.

(b) INFORMATION.—Information provided under subsection (a)

shall be included in any appropriate form, instruction, notice, or

other guidance issued to the public by the Secretary of the Treasury

or the Federal Election Commission regarding reporting requirements of political organizations (as defined in section 527 of the

Internal Revenue Code of 1986) or reporting requirements under

the Federal Election Campaign Act of 1971.

SEC. 5. WAIVER OF FILING AMOUNTS.

(a) WAIVER OF FILING AMOUNTS.—Section 527 of the Internal

Revenue Code of 1986 is amended by adding at the end the following: ‘‘(k) AUTHORITY TO WAIVE.—The Secretary may waive all or

any portion of the— ‘‘(1) tax assessed on an organization by reason of the failure

of the organization to comply with the requirements of subsection (i), or

‘‘(2) amount imposed under subsection (j) for a failure to

comply with the requirements thereof,

on a showing that such failure was due to reasonable cause and

not due to willful neglect.’’. (b) EFFECTIVE DATE.—The amendment made by subsection (a)

shall apply to any tax assessed or amount imposed after June

30, 2000.

26 USC 527 note.

26 USC 527.

Public

information.

26 USC 527 note.

26 USC 6012

note.

PUBLIC LAW 107–276—NOV. 2, 2002 116 STAT. 1933

SEC. 6. MODIFICATIONS TO SECTION 527 ORGANIZATION DISCLOSURE

PROVISIONS.

(a) UNSEGREGATED FUNDS NOT TO AVOID TAX.—Paragraph (4)

of section 527(i) of the Internal Revenue Code of 1986 (relating

to failure to notify) is amended by adding at the end the following

new sentence: ‘‘For purposes of the preceding sentence, the term ‘exempt function income’ means any amount described in a subparagraph of subsection (c)(3), whether or not segregated for use for

an exempt function.’’. (b) PROCEDURES FOR ASSESSMENT AND COLLECTION OF

AMOUNTS.—Paragraph (1) of section 527(j) of the Internal Revenue

Code of 1986 (relating to required disclosure of expenditures and

contributions) is amended by adding at the end the following new

sentence: ‘‘For purposes of subtitle F, the amount imposed by this

paragraph shall be assessed and collected in the same manner

as penalties imposed by section 6652(c).’’. (c) DUPLICATE WRITTEN FILINGS NOT REQUIRED.—Subparagraph (A) of section 527(i)(1) of the Internal Revenue Code of

1986 is amended by striking ‘‘, electronically and in writing,’’ and

inserting ‘‘electronically’’. (d) APPLICATION OF FRAUD PENALTY.—Section 7207 of the

Internal Revenue Code of 1986 (relating to fraudulent returns,

statements, and other documents) is amended by striking ‘‘pursuant

to subsection (b) of section 6047 or pursuant to subsection (d)

of section 6104’’ and inserting ‘‘pursuant to section 6047(b), section

6104(d), or subsection (i) or (j) of section 527’’.

(e) CONTENTS AND FILING OF REPORT.—

(1) CONTENTS.—Section 527(j)(3) of the Internal Revenue

Code of 1986 (relating to contents of report) is amended—

(A) by inserting ‘‘, date, and purpose’’ after ‘‘The

amount’’ in subparagraph (A), and

(B) by inserting ‘‘and date’’ after ‘‘the amount’’ in

subparagraph (B).

(2) ELECTRONIC FILING.—Section 527(j) of such Code is

amended by adding at the end the following new paragraph:

‘‘(7) ELECTRONIC FILING.—Any report required under paragraph (2) with respect to any calendar year shall be filed

in electronic form if the organization has, or has reason to

expect to have, contributions exceeding $50,000 or expenditures

exceeding $50,000 in such calendar year.’’.

(3) ELECTRONIC FILING AND ACCESS OF REQUIRED DISCLOSURES.—Section 527 of such Code, as amended by section 5(a),

is amended by redesignating subsection (k) as subsection (l)

and by inserting after subsection (j) the following new subsection:

‘‘(k) PUBLIC AVAILABILITY OF NOTICES AND REPORTS.—

‘‘(1) IN GENERAL.—The Secretary shall make any notice

described in subsection (i)(1) or report described in subsection

(j)(7) available for public inspection on the Internet not later

than 48 hours after such notice or report has been filed (in

addition to such public availability as may be made under

section 6104(d)(7)).

‘‘(2) ACCESS.—The Secretary shall make the entire database

of notices and reports which are made available to the public

under paragraph (1) searchable by the following items (to the

extent the items are required to be included in the notices

and reports):

Deadline.

26 USC 7207.

26 USC 527.

116 STAT. 1934 PUBLIC LAW 107–276—NOV. 2, 2002

‘‘(A) Names, States, zip codes, custodians of records,

directors, and general purposes of the organizations.

‘‘(B) Entities related to the organizations.

‘‘(C) Contributors to the organizations.

‘‘(D) Employers of such contributors.

‘‘(E) Recipients of expenditures by the organizations.

‘‘(F) Ranges of contributions and expenditures.

‘‘(G) Time periods of the notices and reports.

Such database shall be downloadable.’’.

(f) CONTENTS OF NOTICE.—Section 527(i)(3) of the Internal Revenue Code of 1986 (relating to contents of notice) is amended

by striking ‘‘and’’ at the end of subparagraph (D), by redesignating

subparagraph (E) as subparagraph (F), and by inserting after

subparagraph (D) the following new subparagraph:

‘‘(E) whether the organization intends to claim an

exemption from the requirements of subsection (j) or section

6033, and’’.

(g) TIMING OF NOTICE IN CASE OF MATERIAL CHANGE.—

(1) IN GENERAL.—Subparagraph (B) of section 527(i)(1) of

the Internal Revenue Code of 1986 (relating to general notification requirement) is amended by inserting ‘‘or, in the case

of any material change in the information required under paragraph (3), for the period beginning on the date on which the

material change occurs and ending on the date on which such

notice is given’’ after ‘‘given’’.

(2) TIME TO GIVE NOTICE.—Section 527(i)(2) of the Internal

Revenue Code of 1986 (relating to time to give notice) is

amended by inserting ‘‘or, in the case of any material change

in the information required under paragraph (3), not later

than 30 days after such material change’’ after ‘‘established’’.

(3) EFFECT OF FAILURE.—Paragraph (4) of section 527(i)

of the Internal Revenue Code of 1986 (relating to effect of

failure) is amended by inserting before the period at the end

the following: ‘‘or, in the case of a failure relating to a material

change, by taking into account such income and deductions

only during the period beginning on the date on which the

material change occurs and ending on the date on which notice

is given under this subsection’’.

(h) EFFECTIVE DATES.—

(1) SUBSECTIONS (a) AND (b).—The amendments made by

subsections (a) and (b) shall apply to failures occurring on

or after the date of the enactment of this Act.

(2) SUBSECTION (c).—The amendments made by subsection

(c) shall take effect as if included in the amendments made

by Public Law 106–230.

(3) SUBSECTION (d).—The amendment made by subsection

(d) shall apply to reports and notices required to be filed on

or after the date of the enactment of this Act.

(4) SUBSECTIONS (e)(1) AND (f).—The amendments made

by subsections (e)(1) and (f) shall apply to reports and notices

required to be filed more than 30 days after the date of the

enactment of this Act.

(5) SUBSECTIONS (e)(2) AND (e)(3).—The amendments made

by subsections (e)(2) and (e)(3) shall apply to reports required

to be filed on or after June 30, 2003.

(6) SUBSECTION (g).—

26 USC 527 note.

26 USC 527 note.

26 USC 7207

note.

26 USC 527 note.

26 USC 527 note.

Applicability.

Deadline.

26 USC 527.

PUBLIC LAW 107–276—NOV. 2, 2002 116 STAT. 1935

LEGISLATIVE HISTORY—H.R. 5596:

CONGRESSIONAL RECORD, Vol. 148 (2002):

Oct. 16, considered and passed House.

Oct. 17, considered and passed Senate.

Æ

(A) IN GENERAL.—The amendments made by subsection

(g) shall apply to material changes on or after the date

of the enactment of this Act.

(B) TRANSITION RULE.—In the case of a material change

occurring during the 30-day period beginning on the date

of the enactment of this Act, a notice under section 527(i)

of the Internal Revenue Code of 1986 (as amended by

this Act) shall not be required to be filed under such

section before the later of— (i) 30 days after the date of such material change,

or

(ii) 45 days after the date of the enactment of

this Act.

SEC. 7. EFFECT OF AMENDMENTS ON EXISTING DISCLOSURES.

Notices, reports, or returns that were required to be filed with

the Secretary of the Treasury before the date of the enactment

of the amendments made by this Act and that were disclosed

by the Secretary of the Treasury consistent with the law in effect

at the time of disclosure shall remain subject on and after such

date to the disclosure provisions of section 6104 of the Internal

Revenue Code of 1986.

Approved November 2, 2002.

26 USC 6104

note.