59–006 

114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 114–612 

PREVENTING IRS ABUSE AND PROTECTING FREE SPEECH 

ACT 

JUNE 9, 2016.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. BRADY of Texas, from the Committee on Ways and Means, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 5053] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Ways and Means, to whom was referred the 

bill (H.R. 5053) to amend the Internal Revenue Code of 1986 to 

prohibit the Secretary of the Treasury from requiring that the identity of contributors to 501(c) organizations be included in annual 

returns, having considered the same, report favorably thereon with 

an amendment and recommend that the bill as amended do pass. 

CONTENTS 

Page 

I. SUMMARY AND BACKGROUND ............................................................... 3 

A. Purpose and Summary .................................................................... 3 

B. Background and Need for Legislation ............................................ 3 

C. Legislative History ........................................................................... 4 

II. EXPLANATION OF THE BILL ................................................................... 4 

A. Prohibition on Requiring that Identity of Certain Contributors 

to Section 501(c) Organizations be Included on Annual Returns 

(sec. 32 of the bill and sec. 6033 of the Code) .............................. 4 

III. VOTES OF THE COMMITTEE .................................................................... 7 

IV. BUDGET EFFECTS OF THE BILL ............................................................ 8 

A. Committee Estimate of Budgetary Effects ..................................... 8 

B. Statement Regarding New Budget Authority and Tax Expenditures Budget Authority .................................................................. 8 

C. Cost Estimate Prepared by the Congressional Budget Office ...... 8 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF 

THE HOUSE .............................................................................................. 10 


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A. Committee Oversight Findings and Recommendations ................ 10 

B. Statement of General Performance Goals and Objectives ............ 10 

C. Information Relating to Unfunded Mandates ................................ 10 

D. Applicability of House Rule XXI 5(b) ............................................. 10 

E. Tax Complexity Analysis ................................................................. 10 

F. Congressional Earmarks, Limited Tax Benefits, and Limited 

Tariff Benefits ................................................................................. 11 

G. Duplication of Federal Programs .................................................... 11 

H. Disclosure of Directed Rule Makings ............................................. 11 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED 11 

A. Text of Existing Law Amended or Repealed by the Bill, as 

Reported .......................................................................................... 11 

B. Changes in Existing Law Proposed by the Bill, as Reported ....... 19 

VII. DISSENTING VIEWS ................................................................................... 29 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Preventing IRS Abuse and Protecting Free Speech 

Act’’. 

SEC. 2. PROHIBITION ON REQUIRING THAT IDENTITY OF CONTRIBUTORS TO 501(C) ORGANIZATIONS BE INCLUDED IN ANNUAL RETURNS. 

(a) IN GENERAL.—Section 6033 of the Internal Revenue Code of 1986 is amended 

by redesignating subsection (n) as subsection (o) and by inserting after subsection 

(m) the following: 

‘‘(n) IDENTIFYING INFORMATION OF DONORS.— 

‘‘(1) IN GENERAL.—For purposes of subsection (a), the Secretary may not require the name, address, or other identifying information of any contributor to 

any organization described in section 501(c) of any amount of any contribution, 

grant, bequest, devise, or gift of money or property. 

‘‘(2) EXCEPTIONS.— 

‘‘(A) IN GENERAL.—Paragraph (1) shall not apply— 

‘‘(i) to any disclosure required by subsection (a)(2), and 

‘‘(ii) with respect to any a contribution, grant, bequest, devise, or gift 

of money or property made by an officer or director of the organization 

(or an individual having powers or responsibilities similar to those of 

officers or directors) or any covered employee. 

‘‘(B) COVERED EMPLOYEE.—For purposes of this paragraph, the term ‘covered employee’ means any employee (including any former employee) of the 

organization if the employee is one of the 5 highest compensated employees 

of the organization for the taxable year. 

‘‘(C) COMPENSATION FROM RELATED ORGANIZATIONS.— 

‘‘(i) IN GENERAL.—Compensation of a covered employee by the organization shall include any compensation paid with respect to employment 

of such employee by any related person or governmental entity. 

‘‘(ii) RELATED ORGANIZATIONS.—A person or governmental entity shall 

be treated as related to the organization if such person or governmental 

entity— 

‘‘(I) controls, or is controlled by, the organization, 

‘‘(II) is controlled by one or more persons that control the organization, 

‘‘(III) is a supported organization (as defined in section 509(f)(3)) 

during the taxable year with respect to the organization, 

‘‘(IV) is a supporting organization described in section 509(a)(3) 

during the taxable year with respect to the organization, or 

‘‘(V) 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.’’. 

(b) CONFORMING AMENDMENT.—Section 6033(b)(5) of such Code is amended— 

(1) by striking ‘‘all’’, and 

(2) by adding at the end the following: ‘‘to the extent not prohibited by subsection (n),’’. 

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to returns required to be filed for taxable years ending after the date of the enactment 

of this Act. 


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1Washington Post, ‘‘IRS Agrees to Pay Non-Profit Group $50,000 for Unauthorized Release of 

Tax Return,’’ June 24, 2014. 2 Internal Revenue Service Director of Exempt Organizations, Remarks before the Urban Institute’s Center on Nonprofits and Philanthropy, December 1, 2015. 

I. SUMMARY AND BACKGROUND 

A. PURPOSE AND SUMMARY

H.R. 5053, as reported by the Committee on Ways and Means, 

would prohibit the Internal Revenue Service (IRS) from collecting 

the identity of donors who contribute to tax-exempt organizations. 

Under this legislation, a tax-exempt organization would be required to report only information on donors who contribute $5,000 

or more during a single tax year and who are either an officer or 

director of the organization or one of its five highest paid employees. This information would be excluded from public disclosure. 

B. BACKGROUND AND NEED FOR LEGISLATION

Current law requires section 501(c)(3) tax-exempt organizations 

to report information on substantial donors. The IRS defines a substantial donor as a contributor who gives $5,000 or more to an organization in a calendar year. This information is reported on the 

Schedule B of the Form 990. The requirement to file a Form 990 

applies to tax-exempt organizations generally, not just to section 

501(c)(3) tax-exempt organizations. Thus, the IRS has expanded 

the substantial donor reporting requirements to more than section 

501(c)(3) tax-exempt organizations. While the IRS does not make 

this information public, there have been instances where IRS employees have improperly accessed and released the Schedule B 

donor list. A notable example is the National Organization for Marriage, which had information from its Schedule B leaked in 2012 

and the IRS subsequently paid $50,000 to settle a lawsuit with the 

organization claiming that the IRS improperly accessed the information.1 Certain states, including California, have moved to make 

Schedule B information public. The move to publicize Schedule B 

information was the subject of a recent lawsuit, Americans for 

Prosperity Foundation v. Kamala Harris, Attorney General for California. The Attorney General of California wanted to require that 

the Americans for Prosperity Foundation disclose its Schedule B to 

the California State Registry. In April 2016, the U.S. District Court 

ruled that requiring the organization to disclose its Schedule B was 

unconstitutional. 

In recent years it was also revealed that the IRS used inappropriate criteria to target organizations applying for tax-exempt status. Additionally, the IRS is considering eliminating Schedule B entirely.2 H.R. 5053 would protect taxpayers from improper disclosure 

of Schedule B information, as well as limit the IRS’s ability to target organizations improperly. The legislation also eliminates a burdensome reporting requirement for tax-exempt organizations. 


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3Sec. 6033(a). 

C. LEGISLATIVE HISTORY

Background 

H.R. 5053, the Preventing IRS Abuse and Protecting Free Speech 

Act, was introduced on April 26, 2016, and was referred to the 

Committee on Ways and Means. 

Committee action 

The Committee on Ways and Means marked up H.R. 5053, the 

Preventing IRS Abuse and Protecting Free Speech Act, on April 28, 

2016. 

The Committee approved the Chairman’s amendment in the nature of a substitute. Having considered the bill, as amended, the 

Committee favorable reported H.R. 5053 (with a quorum being 

present). 

Committee hearings 

Information reporting requirements for tax-exempt organizations, 

as well as improper targeting of tax-exempt organizations by the 

IRS, were discussed at multiple hearings in the 114th Congress including the Oversight Subcommittee hearing on the 2015 Tax Filing Season (April 22, 2015), and the Oversight Subcommittee hearing on IRS Audit Selection Process (July 23, 2015). 

Improper targeting of tax-exempt organizations was also discussed at multiple hearings in the 113th Congress, including the 

Oversight Subcommittee hearing on IRS Operations and the 2012 

Tax Return Filing Season (March 22, 2012), the Oversight Subcommittee hearing on Public Charity Organizational Issues, Unrelated Business Income Tax, and the Revised Form 990 (July 25, 

2012), the Full Committee hearing on IRS Targeting Conservative 

Groups (May 17, 2013), the Full Committee hearing on the Status 

of IRS’s Review of Taxpayer Targeting Practices (June 27, 2013), 

the Oversight Subcommittee hearing on the IRS’s Exempt Organizations Division Post-Treasury Inspector General for Tax Administration Audit (September 18, 2013), and the Oversight Subcommittee hearing on IRS Operations and the 2014 Tax Return 

Filing Season (April 30, 2014). 

II. EXPLANATION OF THE BILL 

A. PROHIBITION ON REQUIRING THAT IDENTITY OF CERTAIN CON- TRIBUTORS TO SECTION 501(c) ORGANIZATIONS BE INCLUDED ON

ANNUAL RETURNS (SEC. 32 OF THE BILL AND SEC. 6033 OF THE

CODE) 

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.3 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, 


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4 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). 

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’’).4 The Schedule B 

is open to public inspection for an organization that files Form 

990–PF (private foundations) or a section 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. 


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5Sec. 6033(i). 

6Sec. 6033(a)(2)(A); Treas. Reg. secs. 1.6033–2(a)(2)(i) and (g)(1). 

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.5

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.6

REASONS FOR CHANGE

The Committee is concerned that the IRS is collecting sensitive 

information about donors who contribute to tax-exempt organizations. Although the IRS is required by law to maintain the confidentiality this information, the Committee is aware of instances 

in which the information was released to third parties. Furthermore, the Committee is concerned that the IRS might use donor information to penalize tax-exempt organizations or donors based on 

their political beliefs. By limiting the contribution information taxexempt organizations report to the IRS, the provision will protect 

taxpayers’ identities and help prevent inappropriate political targeting by the IRS. In addition, the Committee believes the Schedule B provides little administrative benefit to the IRS. In fact, senior leadership of the IRS’s Exempt Organizations Division has stated recently that the IRS is considering eliminating the Schedule B 

filing requirement. 

EXPLANATION OF PROVISION

The provision limits the contributor information that must be reported by an organization described in section 501(c) on its annual 

information return. Under the provision, 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 provision 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 powVerDate Sep 11 2014 06:54 Jun 10, 2016 Jkt 059006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\HR612.XXX HR612

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ers 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 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 provision 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 provision is effective for returns required to be filed for taxable years ending after the date of enactment. 

III. VOTES OF THE COMMITTEE 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the following statement is made concerning the vote of the Committee on Ways and Means in its consideration of H.R. 5053, a bill to prohibit the Secretary of the 

Treasury from requiring that the identity of contributors of 501(c) 

organizations be included in annual returns. 

The Chairman’s amendment in the nature of a substitute was 

adopted by a voice vote (with a quorum being present). 

The bill, H.R. 5053, was ordered favorably reported to the House 

of Representatives as amended by a roll call vote of 23 yeas to 15 

nays (with a quorum being present). The vote was as follows: 

Representative Yea Nay Present Representative Yea Nay Present 

Mr. Brady ............................ X ......... ............. Mr. Levin ........................................ ......... X .............

Mr. Johnson ......................... X ......... ............. Mr. Rangel ..................................... ......... X .............

Mr. Nunes ............................ X ......... ............. Mr. McDermott ............................... ......... X .............

Mr. Tiberi ............................. X ......... ............. Mr. Lewis ....................................... ......... X .............

Mr. Reichert ........................ X ......... ............. Mr. Neal ......................................... ......... X .............

Mr. Boustany ....................... ......... ......... ............. Mr. Becerra .................................... ......... X .............

Mr. Roskam ......................... X ......... ............. Mr. Doggett .................................... ......... X .............

Mr. Price .............................. X ......... ............. Mr. Thompson ................................ ......... X .............

Mr. Buchanan ..................... X ......... ............. Mr. Larson ...................................... ......... X .............

Mr. Smith (NE) .................... X ......... ............. Mr. Blumenauer ............................. ......... X .............

Ms. Jenkins ......................... X ......... ............. Mr. Kind ......................................... ......... X .............

Mr. Paulsen ......................... X ......... ............. Mr. Pascrell .................................... ......... X .............

Mr. Marchant ...................... X ......... ............. Mr. Crowley .................................... ......... X .............

Mrs. Black ........................... X ......... ............. Mr. Davis ....................................... ......... X .............

Mr. Reed .............................. X ......... ............. Ms. Sanchez ................................... ......... X .............

Mr. Young ............................ X ......... .............

Mr. Kelly .............................. X ......... .............

Mr. Renacci ......................... X ......... .............


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Representative Yea Nay Present Representative Yea Nay Present 

Mr. Meehan ......................... X ......... .............

Mrs. Noem ........................... X ......... .............

Mr. Holding ......................... X ......... .............

Mr. Smith (MO) ................... X ......... .............

Mr. Dold .............................. X ......... .............

Mr. Rice ............................... X ......... .............

IV. BUDGET EFFECTS OF THE BILL 

A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS

In compliance with clause 3(d) of rule XIII of the Rules of the 

House of Representatives, the following statement is made concerning the effects on the budget of the bill, H.R. 5053, as reported. 

The bill, as reported, is estimated to have the following effect on 

Federal fiscal year budget receipts for the period 2016–2026. 

Fiscal Years [Millions of Dollars] 

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

— ¥1 ¥2 ¥2 ¥2 ¥2 ¥2 ¥2 ¥2 ¥2 ¥2 ¥7 ¥16 

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

Pursuant to clause 8 of rule XIII of the Rules of the House of 

Representatives, the following statement is made by the Joint Committee on Taxation with respect to the provisions of the bill amending the Internal Revenue Code of 1986: The gross budgetary effect 

(before incorporating macroeconomic effects) in any fiscal year is 

less than 0.25 percent of the current projected gross domestic product of the United States for that fiscal year; therefore, the bill is 

not ‘‘major legislation’’ for purposes of requiring that the estimate 

include the budgetary effects of changes in economic output, employment, capital stock and other macroeconomic variables. 

B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX

EXPENDITURES BUDGET AUTHORITY

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee states that the bill involves no new or increased budget authority. The Committee further states that there are no new or increased tax expenditures. 

C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET

OFFICE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, requiring a cost estimate prepared by 

the CBO, the following statement by CBO is provided. 


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U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, May 6, 2016. 

Hon. KEVIN BRADY, 

Chairman, Committee on Ways and Means, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 5053, the Preventing IRS 

Abuse and Protecting Free Speech Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Peter Huether. 

Sincerely, 

KEITH HALL. 

Enclosure. 

H.R. 5053—Preventing IRS Abuse and Protecting Free Speech Act 

H.R. 5053 would amend the Internal Revenue Code to limit the 

information that a tax-exempt organization must report about its 

contributors on its annual information return. Under current law, 

some organizations that are tax-exempt under section 501(c) of the 

Internal Revenue Code must report to the Internal Revenue Service the names and addresses or other identifying information of 

contributors of $5,000 or more. The bill would limit the Secretary 

of the Treasury from requiring the name, address, or other identifying information of any contributor regardless of the nature or size 

of the contribution with two exceptions. The Secretary may still require the information relating to prohibited tax shelter transactions and for contributions of $5,000 or more by officers, directors, or certain highly paid employees of the organization. 

The staff of the Joint Committee on Taxation (JCT) estimates 

that the legislation would reduce revenues by $7 million over the 

2016–2021 period and by $16 million over the 2016–2026 period. 

The Statutory Pay-As-You-Go Act of 2010 establishes budgetreporting and enforcement procedures for legislation affecting direct spending and revenues. Enacting H.R. 5053 would result in a 

reduction in revenues in each year beginning in 2017. The estimated increases in the deficit are shown in the following table. 

CBO and JCT estimate that enacting the bill would not increase 

net direct spending or on-budget deficits by more than $5 billion 

in any of the four consecutive 10-year periods beginning in 2027. 

JCT has determined that the bill contains no intergovernmental 

or private-sector mandates as defined in the Unfunded Mandates 

Reform Act. 

The CBO staff contact for this estimate is Peter Huether. The estimate was approved by David Weiner, Assistant Director for Tax 

Analysis. 


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CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 5053, AS ORDERED REPORTED BY THE 

HOUSE COMMITTEE ON WAYS AND MEANS ON APRIL 28, 2016 

By fiscal year, in millions of dollars— 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016– 

2021 

2016– 

2026 

NET INCREASE IN THE DEFICIT 

Statutory Pay-As-You-Go Impact .... 0 1 2 2 2 2 2 2 2 2 2 7 16 

Source: Staff of the Joint Committee on Taxation. 

Note: Components do not sum to totals because of rounding. 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE 

RULES OF THE HOUSE 

A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

With respect to clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives (relating to oversight findings), the Committee advises that it was as a result of the Committee’s review of 

the provisions of H.R. 5053 that the Committee concluded that it 

is appropriate to report the bill, as amended, favorably to the 

House of Representatives with the recommendation that the bill do 

pass. 

B. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

With respect to clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the bill contains no measure that authorizes funding, so no statement of general performance goals and objectives for which any measure authorizes funding is required. 

C. INFORMATION RELATING TO UNFUNDED MANDATES

This information is provided in accordance with section 423 of 

the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104–4). 

The Committee has determined that the bill contains no unfunded mandate on the private sector, nor does it impose a Federal 

intergovernmental mandate on State, local, or tribal governments. 

D. APPLICABILITY OF HOUSE RULE XXI 5(b) 

Rule XXI 5(b) of the Rules of the House of Representatives provides, in part, that ‘‘A bill or joint resolution, amendment, or conference report carrying a Federal income tax rate increase may not 

be considered as passed or agreed to unless so determined by a 

vote of not less than three-fifths of the Members voting, a quorum 

being present.’’ The Committee has carefully reviewed the bill and 

states that the bill does not involve any Federal income tax rate 

increases within the meaning of the rule. 

E. TAX COMPLEXITY ANALYSIS

Section 4022(b) of the Internal Revenue Service Restructuring 

and Reform Act of 1998 (‘‘IRS Reform Act’’) requires the staff of the 

Joint Committee on Taxation (in consultation with the Internal 

Revenue Service and the Treasury Department) to provide a tax 

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islation reported by the Senate Committee on Finance, the House 

Committee on Ways and Means, or any committee of conference if 

the legislation includes a provision that directly or indirectly 

amends the Internal Revenue Code of 1986 and has widespread applicability to individuals or small businesses. 

Pursuant to clause 3(h)(1) of rule XIII of the Rules of the House 

of Representatives, the staff of the Joint Committee on Taxation 

has determined that a complexity analysis is not required under 

section 4022(b) of the IRS Reform Act because the bill contains no 

provisions that amend the Internal Revenue Code of 1986 and that 

have ‘‘widespread applicability’’ to individuals or small businesses, 

within the meaning of the rule. 

F. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND

LIMITED TARIFF BENEFITS

With respect to clause 9 of rule XXI of the Rules of the House 

of Representatives, the Committee has carefully reviewed the provisions of the bill and states that the provisions of the bill do not 

contain any congressional earmarks, limited tax benefits, or limited 

tariff benefits within the meaning of the rule. 

G. DUPLICATION OF FEDERAL PROGRAMS

In compliance with Sec. 3(g)(2) of H. Res. 5 (114th Congress), the 

Committee states that no provision of the bill establishes or reauthorizes: (1) a program of the Federal Government known to be duplicative of another Federal program, (2) a program included in any 

report from the Government Accountability Office to Congress pursuant to section 21 of Public Law 111–139, or (3) a program related 

to a program identified in the most recent Catalog of Federal Domestic Assistance, published pursuant to the Federal Program Information Act (Public Law 95–220, as amended by Public Law 98– 

169). 

H. DISCLOSURE OF DIRECTED RULE MAKINGS

In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), the 

following statement is made concerning directed rule makings: The 

Committee estimates that the bill requires no directed rule makings within the meaning of such section. 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS 

REPORTED 

A. TEXT OF EXISTING LAW AMENDED OR REPEALED BY THE BILL, AS

REPORTED

In compliance with clause 3(e)(1)(A) of rule XIII of the Rules of 

the House of Representatives, the text of each section proposed to 

be amended or repealed by the bill, as reported, is shown below: 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e)(1)(A) of rule XIII of the Rules of 

the House of Representatives, the text of each section proposed to 

be amended or repealed by the bill, as reported, is shown below: 


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INTERNAL REVENUE CODE OF 1986 

* * * * * * * 

Subtitle F—Procedure and Administration 

* * * * * * * 

CHAPTER 61—INFORMATION AND RETURNS 

* * * * * * * 

Subchapter A—Returns and Records 

* * * * * * * 

PART III—INFORMATION RETURNS 

Subpart A—Information Concerning Persons Subject to 

Special Provisions 

* * * * * * * 

SEC. 6033. RETURNS BY EXEMPT ORGANIZATIONS. 

(a) ORGANIZATIONS REQUIRED TO FILE.— (1) IN GENERAL.— Except as provided in paragraph (3), every 

organization exempt from taxation under section 501(a) shall 

file an annual return, stating specifically the items of gross income, receipts, and disbursements, and such other information 

for the purpose of carrying out the internal revenue laws as 

the Secretary may by forms or regulations prescribe, and shall 

keep such records, render under oath such statements, make 

such other returns, and comply with such rules and regulations as the Secretary may from time to time prescribe; except 

that, in the discretion of the Secretary, any organization described in section 401(a) may be relieved from stating in its return any information which is reported in returns filed by the 

employer which established such organization. 

(2) BEING A PARTY TO CERTAIN REPORTABLE TRANSACTIONS.— 

Every tax-exempt entity described in section 4965(c) shall file 

(in such form and manner and at such time as determined by 

the Secretary) a disclosure of— 

(A) such entity’s being a party to any prohibited tax 

shelter transaction (as defined in section 4965(e)), and 

(B) the identity of any other party to such transaction 

which is known by such tax-exempt entity. 

(3) EXCEPTIONS FROM FILING.— 

(A) MANDATORY EXCEPTIONS.—Paragraph (1) shall not 

apply to— 

(i) churches, their integrated auxiliaries, and conventions or associations of churches, 

(ii) any organization (other than a private foundation, as defined in section 509(a)) described in subparagraph (C), the gross receipts of which in each taxable year are normally not more than $5,000, or 


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(iii) the exclusively religious activities of any religious order. 

(B) DISCRETIONARY EXCEPTIONS.—The Secretary may relieve any organization required under paragraph (1) (other 

than an organization described in section 509(a)(3)) to file 

an information return from filing such a return where he 

determines that such filing is not necessary to the efficient 

administration of the internal revenue laws. 

(C) CERTAIN ORGANIZATIONS.—The organizations referred to in subparagraph (A)(ii) are— 

(i) a religious organization described in section 

501(c)(3); 

(ii) an educational organization described in section 

170(b)(1)(A)(ii); 

(iii) a charitable organization, or an organization for 

the prevention of cruelty to children or animals, described in section 501(c)(3), if such organization is supported, in whole or in part, by funds contributed by 

the United States or any State or political subdivision 

thereof, or is primarily supported by contributions of 

the general public; 

(iv) an organization described in section 501(c)(3), if 

such organization is operated, supervised, or controlled by or in connection with a religious organization described in clause (i); 

(v) an organization described in section 501(c)(8); 

and 

(vi) an organization described in section 501(c)(1), if 

such organization is a corporation wholly owned by 

the United States or any agency or instrumentality 

thereof, or a wholly-owned subsidiary of such a corporation. 

(b) CERTAIN ORGANIZATIONS DESCRIBED IN SECTION 501(C)(3).— 

Every organization described in section 501(c)(3) which is subject 

to the requirements of subsection (a) shall furnish annually information, at such time and in such manner as the Secretary may by 

forms or regulations prescribe, setting forth— 

(1) its gross income for the year, 

(2) its expenses attributable to such income and incurred 

within the year, 

(3) its disbursements within the year for the purposes for 

which it is exempt, 

(4) a balance sheet showing its assets, liabilities, and net 

worth as of the beginning of such year, 

(5) the total of the contributions and gifts received by it during the year, and the names and addresses of all substantial 

contributors, 

(6) the names and addresses of its foundation managers 

(within the meaning of section 4946(b)(1)) and highly compensated employees, 

(7) the compensation and other payments made during the 

year to each individual described in paragraph (6), 

(8) in the case of an organization with respect to which an 

election under section 501(h) is effective for the taxable year, 


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the following amounts for such organization for such taxable 

year: 

(A) the lobbying expenditures (as defined in section 

4911(c)(1)), 

(B) the lobbying nontaxable amount (as defined in section 4911(c)(2)), 

(C) the grass roots expenditures (as defined in section 

4911(c)(3)), and 

(D) the grass roots nontaxable amount (as defined in section 4911(c)(4)), 

(9) such other information with respect to direct or indirect 

transfers to, and other direct or indirect transactions and relationships with, other organizations described in section 501(c) 

(other than paragraph (3) thereof) or section 527 as the Secretary may require to prevent— 

(A) diversion of funds from the organization’s exempt 

purpose, or 

(B) misallocation of revenues or expenses, 

(10) the respective amounts (if any) of the taxes imposed on 

the organization, or any organization manager of the organization, during the taxable year under any of the following provisions (and the respective amounts (if any) of reimbursements 

paid by the organization during the taxable year with respect 

to taxes imposed on any such organization manager under any 

of such provisions): 

(A) section 4911 (relating to tax on excess expenditures 

to influence legislation), 

(B) section 4912 (relating to tax on disqualifying lobbying expenditures of certain organizations), 

(C) section 4955 (relating to taxes on political expenditures of section 501(c)(3) organizations), except to the extent that, by reason of section 4962, the taxes imposed 

under such section are not required to be paid or are credited or refunded, and 

(D) section 4959 (relating to taxes on failures by hospital 

organizations), 

(11) the respective amounts (if any) of— 

(A) the taxes imposed with respect to the organization 

on any organization manager, or any disqualified person, 

during the taxable year under section 4958 (relating to 

taxes on private excess benefit from certain charitable organizations), and 

(B) reimbursements paid by the organization during the 

taxable year with respect to taxes imposed under such section, except to the extent that, by reason of section 4962, 

the taxes imposed under such section are not required to 

be paid or are credited or refunded, 

(12) such information as the Secretary may require with respect to any excess benefit transaction (as defined in section 

4958), 

(13) such information with respect to disqualified persons as 

the Secretary may prescribe, 

(14) such information as the Secretary may require with respect to disaster relief activities, including the amount and use 

of qualified contributions to which section 1400S(a) applies, 


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(15) in the case of an organization to which the requirements 

of section 501(r) apply for the taxable year— 

(A) a description of how the organization is addressing 

the needs identified in each community health needs assessment conducted under section 501(r)(3) and a description of any such needs that are not being addressed together with the reasons why such needs are not being addressed, and 

(B) the audited financial statements of such organization 

(or, in the case of an organization the financial statements 

of which are included in a consolidated financial statement 

with other organizations, such consolidated financial statement). 

(16) such other information for purposes of carrying out the 

internal revenue laws as the Secretary may require. 

For purposes of paragraph (8), if section 4911(f) applies to the organization for the taxable year, such organization shall furnish the 

amounts with respect to the affiliated group as well as with respect 

to such organization. 

(c) ADDITIONAL PROVISIONS RELATING TO PRIVATE FOUNDA- TIONS.—In the case of an organization which is a private foundation (within the meaning of section 509(a))— 

(1) the Secretary shall by regulations provide that the private foundation shall include in its annual return under this 

section such information (not required to be furnished by subsection (b) or the forms or regulations prescribed thereunder) 

as would have been required to be furnished under section 

6056 (relating to annual reports by private foundations) as 

such section 6056 was in effect on January 1, 1979, and 

(2) the foundation managers shall furnish copies of the annual return under this section to such State officials, at such 

times, and under such conditions, as the Secretary may by regulations prescribe. 

Nothing in paragraph (1) shall require the inclusion of the name 

and address of any recipient (other than a disqualified person within the meaning of section 4946) of 1 or more charitable gifts or 

grants made by the foundation to such recipient as an indigent or 

needy person if the aggregate of such gifts or grants made by the 

foundation to such recipient during the year does not exceed 

$1,000. 

(d) SECTION TO APPLY TO NONEXEMPT CHARITABLE TRUSTS AND

NONEXEMPT PRIVATE FOUNDATIONS.—The following organizations 

shall comply with the requirements of this section in the same 

manner as organizations described in section 501(c)(3) which are 

exempt from tax under section 501(a): 

(1) NONEXEMPT CHARITABLE TRUSTS.—A trust described in 

section 4947(a)(1) (relating to nonexempt charitable trusts). 

(2) NONEXEMPT PRIVATE FOUNDATIONS.—A private foundation which is not exempt from tax under section 501(a). 

(e) SPECIAL RULES RELATING TO LOBBYING ACTIVITIES.— (1) REPORTING REQUIREMENTS.— (A) IN GENERAL.—If this subsection applies to an organization for any taxable year, such organization— 

(i) shall include on any return required to be filed 

under subsection (a) for such year information setting 


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forth the total expenditures of the organization to 

which section 162(e)(1) applies and the total amount of 

the dues or other similar amounts paid to the organization to which such expenditures are allocable, and 

(ii) except as provided in paragraphs (2)(A)(i) and 

(3), shall, at the time of assessment or payment of 

such dues or other similar amounts, provide notice to 

each person making such payment which contains a 

reasonable estimate of the portion of such dues or 

other similar amounts to which such expenditures are 

so allocable. 

(B) ORGANIZATIONS TO WHICH SUBSECTION APPLIES.— 

(i) IN GENERAL.—This subsection shall apply to any 

organization which is exempt from taxation under section 501 other than an organization described in section 501(c)(3). 

(ii) SPECIAL RULE FOR IN-HOUSE EXPENDITURES.— 

This subsection shall not apply to the in-house expenditures (within the meaning of section 

162(e)(5)(B)(ii)) of an organization for a taxable year if 

such expenditures do not exceed $2,000. In determining whether a taxpayer exceeds the $2,000 limit 

under this clause, there shall not be taken into account overhead costs otherwise allocable to activities 

described in subparagraphs (A) and (D) of section 

162(e)(1). 

(iii) COORDINATION WITH SECTION 527(F).—This subsection shall not apply to any amount on which tax is 

imposed by reason of section 527(f). 

(C) ALLOCATION.—For purposes of this paragraph— 

(i) IN GENERAL.—Expenditures to which section 

162(e)(1) applies shall be treated as paid out of dues 

or other similar amounts to the extent thereof. 

(ii) CARRYOVER OF LOBBYING EXPENDITURES IN EXCESS OF DUES.—If expenditures to which section 

162(e)(1) applies exceed the dues or other similar 

amounts for any taxable year, such excess shall be 

treated as expenditures to which section 162(e)(1) applies which are paid or incurred by the organization 

during the following taxable year. 

(2) TAX IMPOSED WHERE ORGANIZATION DOES NOT NOTIFY.— 

(A) IN GENERAL.— If an organization— 

(i) elects not to provide the notices described in 

paragraph (1)(A) for any taxable year, or 

(ii) fails to include in such notices the amount allocable to expenditures to which section 162(e)(1) applies (determined on the basis of actual amounts rather than the reasonable estimates under paragraph 

(1)(A)(ii)), 

then there is hereby imposed on such organization for such 

taxable year a tax in an amount equal to the product of 

the highest rate of tax imposed by section 11 for the taxable year and the aggregate amount not included in such 

notices by reason of such election or failure. 


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(B) WAIVER WHERE FUTURE ADJUSTMENTS MADE.—The 

Secretary may waive the tax imposed by subparagraph 

(A)(ii) for any taxable year if the organization agrees to adjust its estimates under paragraph (1)(A)(ii) for the following taxable year to correct any failures. 

(C) TAX TREATED AS INCOME TAX.—For purposes of this 

title, the tax imposed by subparagraph (A) shall be treated 

in the same manner as a tax imposed by chapter 1 (relating to income taxes). 

(3) EXCEPTION WHERE DUES GENERALLY NONDEDUCTIBLE.— 

Paragraph (1)(A) shall not apply to an organization which establishes to the satisfaction of the Secretary that substantially 

all of the dues or other similar amounts paid by persons to 

such organization are not deductible without regard to section 

162(e). 

(f) CERTAIN ORGANIZATIONS DESCRIBED IN SECTION 501(C)(4).— 

Every organization described in section 501(c)(4) which is subject 

to the requirements of subsection (a) shall include on the return required under subsection (a)— 

(1) the information referred to in paragraphs (11), (12) and 

(13) of subsection (b) with respect to such organization, and 

(2) in the case of the first such return filed by such an organization after submitting a notice to the Secretary under section 506(a), such information as the Secretary shall by regulation require in support of the organization’s treatment as an 

organization described in section 501(c)(4). 

(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, 

(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, 


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(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. 

(h) CONTROLLING ORGANIZATIONS.—Each controlling organization 

(within the meaning of section 512(b)(13)) which is subject to the 

requirements of subsection (a) shall include on the return required 

under subsection (a)— 

(1) any interest, annuities, royalties, or rents received from 

each controlled entity (within the meaning of section 

512(b)(13)), 

(2) any loans made to each such controlled entity, and 

(3) any transfers of funds between such controlling organization and each such controlled entity. 

(i) ADDITIONAL NOTIFICATION REQUIREMENTS.—Any organization 

the gross receipts of which in any taxable year result in such organization being referred to in subsection (a)(3)(A)(ii) or (a)(3)(B)— 

(1) shall furnish annually, in electronic form, and at such 

time and in such manner as the Secretary may by regulations 

prescribe, information setting forth— 

(A) the legal name of the organization, 

(B) any name under which such organization operates or 

does business, 

(C) the organization’s mailing address and Internet web 

site address (if any), 

(D) the organization’s taxpayer identification number, 

(E) the name and address of a principal officer, and 

(F) evidence of the continuing basis for the organization’s exemption from the filing requirements under subsection (a)(1), and 

(2) upon the termination of the existence of the organization, 

shall furnish notice of such termination. 

(j) LOSS OF EXEMPT STATUS FOR FAILURE TO FILE RETURN OR NOTICE.— 

(1) IN GENERAL.—If an organization described in subsection 

(a)(1) or (i) fails to file an annual return or notice required 

under either subsection for 3 consecutive years, such organization’s status as an organization exempt from tax under section 

501(a) shall be considered revoked on and after the date set by 

the Secretary for the filing of the third annual return or notice. 

The Secretary shall publish and maintain a list of any organization the status of which is so revoked. 


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(2) APPLICATION NECESSARY FOR REINSTATEMENT.—Any organization the tax-exempt status of which is revoked under paragraph (1) must apply in order to obtain reinstatement of such 

status regardless of whether such organization was originally 

required to make such an application. 

(3) RETROACTIVE REINSTATEMENT IF REASONABLE CAUSE

SHOWN FOR FAILURE.—If, upon application for reinstatement of 

status as an organization exempt from tax under section 

501(a), an organization described in paragraph (1) can show to 

the satisfaction of the Secretary evidence of reasonable cause 

for the failure described in such paragraph, the organization’s 

exempt status may, in the discretion of the Secretary, be reinstated effective from the date of the revocation under such 

paragraph. 

(k) ADDITIONAL PROVISIONS RELATING TO SPONSORING ORGANIZATIONS.—Every organization described in section 4966(d)(1) shall, on 

the return required under subsection (a) for the taxable year— 

(1) list the total number of donor advised funds (as defined 

in section 4966(d)(2)) it owns at the end of such taxable year, 

(2) indicate the aggregate value of assets held in such funds 

at the end of such taxable year, and 

(3) indicate the aggregate contributions to and grants made 

from such funds during such taxable year. 

(l) ADDITIONAL PROVISIONS RELATING TO SUPPORTING ORGANIZA- TIONS.—Every organization described in section 509(a)(3) shall, on 

the return required under subsection (a)— 

(1) list the supported organizations (as defined in section 

509(f)(3)) with respect to which such organization provides support, 

(2) indicate whether the organization meets the requirements of clause (i), (ii), or (iii) of section 509(a)(3)(B), and 

(3) certify that the organization meets the requirements of 

section 509(a)(3)(C). 

(m) ADDITIONAL INFORMATION REQUIRED FROM CO-OP INSURERS.—An organization described in section 501(c)(29) shall include 

on the return required under subsection (a) the following information: 

(1) The amount of the reserves required by each State in 

which the organization is licensed to issue qualified health 

plans. 

(2) The amount of reserves on hand. 

(n) CROSS REFERENCES.—For provisions relating to statements, 

etc., regarding exempt status of organizations, see section 6001. 

For reporting requirements as to certain liquidations, dissolutions, terminations, and contractions, see section 6043(b). 

For provisions relating to penalties for failure to file a return 

required by this section, see section 6652(c). 

For provisions relating to information required in connection 

with certain plans of deferred compensation, see section 6058. 

* * * * * * * 

B. CHANGES IN EXISTING LAW PROPOSED BY THE BILL, AS REPORTED

In compliance with clause 3(e)(1)(B) of rule XIII of the Rules of 

the House of Representatives, changes in existing law proposed by 


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the bill, as reported, are shown as follows (existing law proposed 

to be omitted is enclosed in black brackets, new matter is printed 

in italic, existing law in which no change is proposed is shown in 

roman): 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e)(1)(B) of rule XIII of the Rules of 

the House of Representatives, changes in existing law made by the 

bill, as reported, are shown as follows (existing law proposed to be 

omitted is enclosed in black brackets, new matter is printed in 

italic, and existing law in which no change is proposed is shown in 

roman): 

INTERNAL REVENUE CODE OF 1986 

* * * * * * * 

Subtitle F—Procedure and Administration 

* * * * * * * 

CHAPTER 61—INFORMATION AND RETURNS 

* * * * * * * 

Subchapter A—Returns and Records 

* * * * * * * 

PART III—INFORMATION RETURNS 

Subpart A—Information Concerning Persons Subject to 

Special Provisions 

* * * * * * * 

SEC. 6033. RETURNS BY EXEMPT ORGANIZATIONS. 

(a) ORGANIZATIONS REQUIRED TO FILE.— (1) IN GENERAL.—Except as provided in paragraph (3), every 

organization exempt from taxation under section 501(a) shall 

file an annual return, stating specifically the items of gross income, receipts, and disbursements, and such other information 

for the purpose of carrying out the internal revenue laws as 

the Secretary may by forms or regulations prescribe, and shall 

keep such records, render under oath such statements, make 

such other returns, and comply with such rules and regulations as the Secretary may from time to time prescribe; except 

that, in the discretion of the Secretary, any organization described in section 401(a) may be relieved from stating in its return any information which is reported in returns filed by the 

employer which established such organization. 

(2) BEING A PARTY TO CERTAIN REPORTABLE TRANSACTIONS.— Every tax-exempt entity described in section 4965(c) shall file 

(in such form and manner and at such time as determined by 

the Secretary) a disclosure of— 


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(A) such entity’s being a party to any prohibited tax 

shelter transaction (as defined in section 4965(e)), and 

(B) the identity of any other party to such transaction 

which is known by such tax-exempt entity. 

(3) EXCEPTIONS FROM FILING.— (A) MANDATORY EXCEPTIONS.—Paragraph (1) shall not 

apply to— 

(i) churches, their integrated auxiliaries, and conventions or associations of churches, 

(ii) any organization (other than a private foundation, as defined in section 509(a)) described in subparagraph (C), the gross receipts of which in each taxable year are normally not more than $5,000, or 

(iii) the exclusively religious activities of any religious order. 

(B) DISCRETIONARY EXCEPTIONS.—The Secretary may relieve any organization required under paragraph (1) (other 

than an organization described in section 509(a)(3)) to file 

an information return from filing such a return where he 

determines that such filing is not necessary to the efficient 

administration of the internal revenue laws. 

(C) CERTAIN ORGANIZATIONS.—The organizations referred to in subparagraph (A)(ii) are— 

(i) a religious organization described in section 

501(c)(3); 

(ii) an educational organization described in section 

170(b)(1)(A)(ii); 

(iii) a charitable organization, or an organization for 

the prevention of cruelty to children or animals, described in section 501(c)(3), if such organization is supported, in whole or in part, by funds contributed by 

the United States or any State or political subdivision 

thereof, or is primarily supported by contributions of 

the general public; 

(iv) an organization described in section 501(c)(3), if 

such organization is operated, supervised, or controlled by or in connection with a religious organization described in clause (i); 

(v) an organization described in section 501(c)(8); 

and 

(vi) an organization described in section 501(c)(1), if 

such organization is a corporation wholly owned by 

the United States or any agency or instrumentality 

thereof, or a wholly-owned subsidiary of such a corporation. 

(b) CERTAIN ORGANIZATIONS DESCRIBED IN SECTION 501(C)(3).— 

Every organization described in section 501(c)(3) which is subject 

to the requirements of subsection (a) shall furnish annually information, at such time and in such manner as the Secretary may by 

forms or regulations prescribe, setting forth— 

(1) its gross income for the year, 

(2) its expenses attributable to such income and incurred 

within the year, 

(3) its disbursements within the year for the purposes for 

which it is exempt, 


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(4) a balance sheet showing its assets, liabilities, and net 

worth as of the beginning of such year, 

(5) the total of the contributions and gifts received by it during the year, and the names and addresses of øall¿ substantial 

contributors, to the extent not prohibited by subsection (n), 

(6) the names and addresses of its foundation managers 

(within the meaning of section 4946(b)(1)) and highly compensated employees, 

(7) the compensation and other payments made during the 

year to each individual described in paragraph (6), 

(8) in the case of an organization with respect to which an 

election under section 501(h) is effective for the taxable year, 

the following amounts for such organization for such taxable 

year: 

(A) the lobbying expenditures (as defined in section 

4911(c)(1)), 

(B) the lobbying nontaxable amount (as defined in section 4911(c)(2)), 

(C) the grass roots expenditures (as defined in section 

4911(c)(3)), and 

(D) the grass roots nontaxable amount (as defined in section 4911(c)(4)), 

(9) such other information with respect to direct or indirect 

transfers to, and other direct or indirect transactions and relationships with, other organizations described in section 501(c) 

(other than paragraph (3) thereof) or section 527 as the Secretary may require to prevent— 

(A) diversion of funds from the organization’s exempt 

purpose, or 

(B) misallocation of revenues or expenses, 

(10) the respective amounts (if any) of the taxes imposed on 

the organization, or any organization manager of the organization, during the taxable year under any of the following provisions (and the respective amounts (if any) of reimbursements 

paid by the organization during the taxable year with respect 

to taxes imposed on any such organization manager under any 

of such provisions): 

(A) section 4911 (relating to tax on excess expenditures 

to influence legislation), 

(B) section 4912 (relating to tax on disqualifying lobbying expenditures of certain organizations), 

(C) section 4955 (relating to taxes on political expenditures of section 501(c)(3) organizations), except to the extent that, by reason of section 4962, the taxes imposed 

under such section are not required to be paid or are credited or refunded, and 

(D) section 4959 (relating to taxes on failures by hospital 

organizations), 

(11) the respective amounts (if any) of— 

(A) the taxes imposed with respect to the organization 

on any organization manager, or any disqualified person, 

during the taxable year under section 4958 (relating to 

taxes on private excess benefit from certain charitable organizations), and 


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(B) reimbursements paid by the organization during the 

taxable year with respect to taxes imposed under such section, except to the extent that, by reason of section 4962, 

the taxes imposed under such section are not required to 

be paid or are credited or refunded, 

(12) such information as the Secretary may require with respect to any excess benefit transaction (as defined in section 

4958), 

(13) such information with respect to disqualified persons as 

the Secretary may prescribe, 

(14) such information as the Secretary may require with respect to disaster relief activities, including the amount and use 

of qualified contributions to which section 1400S(a) applies, 

(15) in the case of an organization to which the requirements 

of section 501(r) apply for the taxable year— 

(A) a description of how the organization is addressing 

the needs identified in each community health needs assessment conducted under section 501(r)(3) and a description of any such needs that are not being addressed together with the reasons why such needs are not being addressed, and 

(B) the audited financial statements of such organization 

(or, in the case of an organization the financial statements 

of which are included in a consolidated financial statement 

with other organizations, such consolidated financial statement). 

(16) such other information for purposes of carrying out the 

internal revenue laws as the Secretary may require. 

For purposes of paragraph (8), if section 4911(f) applies to the organization for the taxable year, such organization shall furnish the 

amounts with respect to the affiliated group as well as with respect 

to such organization. 

(c) ADDITIONAL PROVISIONS RELATING TO PRIVATE FOUNDA- TIONS.—In the case of an organization which is a private foundation (within the meaning of section 509(a))— 

(1) the Secretary shall by regulations provide that the private foundation shall include in its annual return under this 

section such information (not required to be furnished by subsection (b) or the forms or regulations prescribed thereunder) 

as would have been required to be furnished under section 

6056 (relating to annual reports by private foundations) as 

such section 6056 was in effect on January 1, 1979, and 

(2) the foundation managers shall furnish copies of the annual return under this section to such State officials, at such 

times, and under such conditions, as the Secretary may by regulations prescribe. 

Nothing in paragraph (1) shall require the inclusion of the name 

and address of any recipient (other than a disqualified person within the meaning of section 4946) of 1 or more charitable gifts or 

grants made by the foundation to such recipient as an indigent or 

needy person if the aggregate of such gifts or grants made by the 

foundation to such recipient during the year does not exceed 

$1,000. 

(d) SECTION TO APPLY TO NONEXEMPT CHARITABLE TRUSTS AND

NONEXEMPT PRIVATE FOUNDATIONS.—The following organizations 


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shall comply with the requirements of this section in the same 

manner as organizations described in section 501(c)(3) which are 

exempt from tax under section 501(a): 

(1) NONEXEMPT CHARITABLE TRUSTS.—A trust described in 

section 4947(a)(1) (relating to nonexempt charitable trusts). 

(2) NONEXEMPT PRIVATE FOUNDATIONS.—A private foundation which is not exempt from tax under section 501(a). 

(e) SPECIAL RULES RELATING TO LOBBYING ACTIVITIES.— (1) REPORTING REQUIREMENTS.— (A) IN GENERAL.—If this subsection applies to an organization for any taxable year, such organization— 

(i) shall include on any return required to be filed 

under subsection (a) for such year information setting 

forth the total expenditures of the organization to 

which section 162(e)(1) applies and the total amount of 

the dues or other similar amounts paid to the organization to which such expenditures are allocable, and 

(ii) except as provided in paragraphs (2)(A)(i) and 

(3), shall, at the time of assessment or payment of 

such dues or other similar amounts, provide notice to 

each person making such payment which contains a 

reasonable estimate of the portion of such dues or 

other similar amounts to which such expenditures are 

so allocable. 

(B) ORGANIZATIONS TO WHICH SUBSECTION APPLIES.— (i) IN GENERAL.—This subsection shall apply to any 

organization which is exempt from taxation under section 501 other than an organization described in section 501(c)(3). 

(ii) SPECIAL RULE FOR IN-HOUSE EXPENDITURES.— 

This subsection shall not apply to the in-house expenditures (within the meaning of section 

162(e)(5)(B)(ii)) of an organization for a taxable year if 

such expenditures do not exceed $2,000. In determining whether a taxpayer exceeds the $2,000 limit 

under this clause, there shall not be taken into account overhead costs otherwise allocable to activities 

described in subparagraphs (A) and (D) of section 

162(e)(1). 

(iii) COORDINATION WITH SECTION 527(F).—This subsection shall not apply to any amount on which tax is 

imposed by reason of section 527(f). 

(C) ALLOCATION.—For purposes of this paragraph— 

(i) IN GENERAL.—Expenditures to which section 

162(e)(1) applies shall be treated as paid out of dues 

or other similar amounts to the extent thereof. 

(ii) CARRYOVER OF LOBBYING EXPENDITURES IN EX- CESS OF DUES.—If expenditures to which section 

162(e)(1) applies exceed the dues or other similar 

amounts for any taxable year, such excess shall be 

treated as expenditures to which section 162(e)(1) applies which are paid or incurred by the organization 

during the following taxable year. 

(2) TAX IMPOSED WHERE ORGANIZATION DOES NOT NOTIFY.— 

(A) IN GENERAL.—If an organization— 


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(i) elects not to provide the notices described in 

paragraph (1)(A) for any taxable year, or 

(ii) fails to include in such notices the amount allocable to expenditures to which section 162(e)(1) applies (determined on the basis of actual amounts rather than the reasonable estimates under paragraph 

(1)(A)(ii)), 

then there is hereby imposed on such organization for such 

taxable year a tax in an amount equal to the product of 

the highest rate of tax imposed by section 11 for the taxable year and the aggregate amount not included in such 

notices by reason of such election or failure. 

(B) WAIVER WHERE FUTURE ADJUSTMENTS MADE.—The 

Secretary may waive the tax imposed by subparagraph 

(A)(ii) for any taxable year if the organization agrees to adjust its estimates under paragraph (1)(A)(ii) for the following taxable year to correct any failures. 

(C) TAX TREATED AS INCOME TAX.—For purposes of this 

title, the tax imposed by subparagraph (A) shall be treated 

in the same manner as a tax imposed by chapter 1 (relating to income taxes). 

(3) EXCEPTION WHERE DUES GENERALLY NONDEDUCTIBLE.— 

Paragraph (1)(A) shall not apply to an organization which establishes to the satisfaction of the Secretary that substantially 

all of the dues or other similar amounts paid by persons to 

such organization are not deductible without regard to section 

162(e). 

(f) CERTAIN ORGANIZATIONS DESCRIBED IN SECTION 501(C)(4).— 

Every organization described in section 501(c)(4) which is subject 

to the requirements of subsection (a) shall include on the return required under subsection (a)— 

(1) the information referred to in paragraphs (11), (12) and 

(13) of subsection (b) with respect to such organization, and 

(2) in the case of the first such return filed by such an organization after submitting a notice to the Secretary under section 506(a), such information as the Secretary shall by regulation require in support of the organization’s treatment as an 

organization described in section 501(c)(4). 

(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 


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(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, 

(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. 

(h) CONTROLLING ORGANIZATIONS.—Each controlling organization 

(within the meaning of section 512(b)(13)) which is subject to the 

requirements of subsection (a) shall include on the return required 

under subsection (a)— 

(1) any interest, annuities, royalties, or rents received from 

each controlled entity (within the meaning of section 

512(b)(13)), 

(2) any loans made to each such controlled entity, and 

(3) any transfers of funds between such controlling organization and each such controlled entity. 

(i) ADDITIONAL NOTIFICATION REQUIREMENTS.—Any organization 

the gross receipts of which in any taxable year result in such organization being referred to in subsection (a)(3)(A)(ii) or (a)(3)(B)— 

(1) shall furnish annually, in electronic form, and at such 

time and in such manner as the Secretary may by regulations 

prescribe, information setting forth— 

(A) the legal name of the organization, 

(B) any name under which such organization operates or 

does business, 

(C) the organization’s mailing address and Internet web 

site address (if any), 

(D) the organization’s taxpayer identification number, 

(E) the name and address of a principal officer, and 

(F) evidence of the continuing basis for the organization’s exemption from the filing requirements under subsection (a)(1), and 


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(2) upon the termination of the existence of the organization, 

shall furnish notice of such termination. 

(j) LOSS OF EXEMPT STATUS FOR FAILURE TO FILE RETURN OR NOTICE.— 

(1) IN GENERAL.—If an organization described in subsection 

(a)(1) or (i) fails to file an annual return or notice required 

under either subsection for 3 consecutive years, such organization’s status as an organization exempt from tax under section 

501(a) shall be considered revoked on and after the date set by 

the Secretary for the filing of the third annual return or notice. 

The Secretary shall publish and maintain a list of any organization the status of which is so revoked. 

(2) APPLICATION NECESSARY FOR REINSTATEMENT.—Any organization the tax-exempt status of which is revoked under paragraph (1) must apply in order to obtain reinstatement of such 

status regardless of whether such organization was originally 

required to make such an application. 

(3) RETROACTIVE REINSTATEMENT IF REASONABLE CAUSE

SHOWN FOR FAILURE.—If, upon application for reinstatement of 

status as an organization exempt from tax under section 

501(a), an organization described in paragraph (1) can show to 

the satisfaction of the Secretary evidence of reasonable cause 

for the failure described in such paragraph, the organization’s 

exempt status may, in the discretion of the Secretary, be reinstated effective from the date of the revocation under such 

paragraph. 

(k) ADDITIONAL PROVISIONS RELATING TO SPONSORING ORGANIZATIONS.—Every organization described in section 4966(d)(1) shall, on 

the return required under subsection (a) for the taxable year— 

(1) list the total number of donor advised funds (as defined 

in section 4966(d)(2)) it owns at the end of such taxable year, 

(2) indicate the aggregate value of assets held in such funds 

at the end of such taxable year, and 

(3) indicate the aggregate contributions to and grants made 

from such funds during such taxable year. 

(l) ADDITIONAL PROVISIONS RELATING TO SUPPORTING ORGANIZATIONS.—Every organization described in section 509(a)(3) shall, on 

the return required under subsection (a)— 

(1) list the supported organizations (as defined in section 

509(f)(3)) with respect to which such organization provides support, 

(2) indicate whether the organization meets the requirements of clause (i), (ii), or (iii) of section 509(a)(3)(B), and 

(3) certify that the organization meets the requirements of 

section 509(a)(3)(C). 

(m) ADDITIONAL INFORMATION REQUIRED FROM CO-OP INSURERS.—An organization described in section 501(c)(29) shall include 

on the return required under subsection (a) the following information: 

(1) The amount of the reserves required by each State in 

which the organization is licensed to issue qualified health 

plans. 

(2) The amount of reserves on hand. 

(n) IDENTIFYING INFORMATION OF DONORS.— 


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(1) IN GENERAL.—For purposes of subsection (a), the Secretary 

may not require the name, address, or other identifying information of any contributor to any organization described in section 501(c) of any amount of any contribution, grant, bequest, 

devise, or gift of money or property. 

(2) EXCEPTIONS.— 

(A) IN GENERAL.—Paragraph (1) shall not apply— 

(i) to any disclosure required by subsection (a)(2), 

and 

(ii) with respect to any a contribution, grant, bequest, 

devise, or gift of money or property made by an officer 

or director of the organization (or an individual having 

powers or responsibilities similar to those of officers or 

directors) or any covered employee. 

(B) COVERED EMPLOYEE.—For purposes of this paragraph, the term ‘‘covered employee’’ means any employee 

(including any former employee) of the organization if the 

employee is one of the 5 highest compensated employees of 

the organization for the taxable year. 

(C) COMPENSATION FROM RELATED ORGANIZATIONS.— 

(i) IN GENERAL.—Compensation of a covered employee by the organization shall include any compensation paid with respect to employment of such employee 

by any related person or governmental entity. 

(ii) RELATED ORGANIZATIONS.—A person or governmental entity shall be treated as related to the organization if such person or governmental entity— 

(I) controls, or is controlled by, the organization, 

(II) is controlled by one or more persons that 

control the organization, 

(III) is a supported organization (as defined in 

section 509(f)(3)) during the taxable year with respect to the organization, 

(IV) is a supporting organization described in 

section 509(a)(3) during the taxable year with respect to the organization, or 

(V) 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. 

ø(n)¿ (o) CROSS REFERENCES.—For provisions relating to statements, etc., regarding exempt status of organizations, see section 

6001. 

For reporting requirements as to certain liquidations, dissolutions, terminations, and contractions, see section 6043(b). 

For provisions relating to penalties for failure to file a return 

required by this section, see section 6652(c). 

For provisions relating to information required in connection 

with certain plans of deferred compensation, see section 6058. 

* * * * * * * 


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VII. DISSENTING VIEWS 

We oppose H.R. 5053, which would prohibit the Secretary of the 

Treasury from collecting the name, address, or other identifying information of contributors to any tax-exempt, 501(c) organization except in limited circumstances. This bill would open the floodgates 

for unlimited, anonymous, unaccountable money to pour into U.S. 

elections—including possibly from foreign sources. 

Under present law, certain 501(c) organizations must attach to 

their annual information returns (IRS Forms 990) a list (Schedule 

B) of donors who contribute $5,000 or more during the year (‘‘substantial contributors’’). The Schedule B is kept confidential by the 

Internal Revenue Service (IRS) and is not made public. 

Certain 501(c) organizations, such as social welfare organizations, are permitted to engage in political activity. These politically 

active 501(c)(4) organizations are required to disclose their substantial contributors to the IRS but are not required to disclose 

them to the public. 

There has been a sharp rise in undisclosed money being spent by 

tax-exempt groups in federal elections since the Supreme Court 

issued its 2010 Citizens United decision. This bill would make it 

even easier for donors to anonymously funnel money in support of 

political candidates. Already in this election cycle, according to the 

Center for Responsive Politics, political spending by tax-exempt 

groups is five times the amount spent at this point during the 2012 

election cycle. 

It is no secret as to why Republicans are working to keep donors 

a secret: the three largest spenders from 2012—representing fully 

51% of the total—include Karl Rove’s Crossroads GPS (that spent 

$71 million); the Koch Brothers’ Americans for Prosperity (that 

spent $36 million); and the Koch Brothers’ American Future Fund 

(that spent $25 million). It is no surprise the Koch Companies Public Sector, LLC sent a letter to Republican Members on the day of 

the markup urging them to support the bill. Simply put, H.R. 5053 

does nothing more than solidify the secrecy around the Republicans’ big campaign efforts. 

The bill also potentially opens the door for unlimited, secret 

money from foreign governments or individuals to be funneled into 

our elections. Currently, foreign money cannot be given or spent in 

our elections. The only real protection we have against the use of 

foreign money by politically active social welfare organizations is 

that they must disclose their substantial contributors to the IRS. 

This requirement means that tax-exempt, 501(c)(4) groups know 

they can be held accountable if they illegally spend foreign money 

in federal elections. Campaign finance reform groups opposing this 

bill warned that, if donor disclosure to the IRS is eliminated, no 

one will know whether a social welfare organization has received 

foreign funds and is illegally spending them in our elections. 


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We should not support efforts to reduce transparency and make 

it easier for donors to pour unlimited funds into political campaigns. For these reasons, we oppose this bill. 

SANDER M. LEVIN, 

Ranking Member. 

Æ 


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