I 

116TH CONGRESS 

2D SESSION H. R. 7525 

To amend the Internal Revenue Code of 1986 to prohibit 501(c)(4) entities 

from using more than 10 percent of total expenditures on certain political 

expenditures, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 9, 2020 

Mr. GOLDEN introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to prohibit 

501(c)(4) entities from using more than 10 percent of 

total expenditures on certain political expenditures, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Crack Down on Dark 

5 Money Act’’. 


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1 SEC. 2. LIMITATION ON COVERED POLITICAL EXPENDI2 TURES BY SOCIAL WELFARE ORGANIZA3 TIONS. 

4 (a) IN GENERAL.—Section 501(c)(4) of the Internal 

5 Revenue Code of 1986 is amended by adding at the end 

6 the following: 

7 ‘‘(C)(i) Subparagraph (A) shall not apply 

8 to an entity for a taxable year if more than 10 

9 percent of the total expenditures for the taxable 

10 year are covered political expenditures. 

11 ‘‘(ii) For purposes of this subparagraph, 

12 the term ‘covered political expenditures’ means 

13 direct or indirect expenditures for an exempt 

14 function described in section 527(e)(2). 

15 ‘‘(iii) The Secretary shall prescribe such 

16 regulations as may be necessary or appropriate 

17 to prevent the avoidance of clause (i), including 

18 regulations relating to a direct or indirect 

19 transfer of all or part of the assets of an entity 

20 to an entity controlled (directly or indirectly) by 

21 the same person or persons who control the 

22 transferor entity.’’. 

23 (b) EXPANSION OF POLITICAL ORGANIZATION DEFI24 NITION.—Section 527(e)(1) of such Code is amended by 

25 striking ‘‘organized and operated primarily for the purVerDate Sep 11 2014 19:01 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7525.IH H7525

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1 pose of’’ and inserting ‘‘, unless such organization is not 

2 established under this section,’’. 

3 (c) POLITICAL INTERVENTION ADDED TO EXEMPT

4 FUNCTION DEFINITION.—Section 527(e) of such Code is 

5 amended— 

6 (1) in paragraph (2)— 

7 (A) by striking ‘‘includes the making of ex8 penditures relating to an office described in the 

9 preceding sentence which, if incurred by the in10 dividual, would be allowable as a deduction 

11 under section 162(a).’’ and inserting ‘‘in12 cludes— 

13 ‘‘(A) the making of expenditures relating 

14 to an office described in the preceding sentence 

15 which, if incurred by the individual, would be 

16 allowable as a deduction under section 162(a), 

17 and 

18 ‘‘(B) political intervention.’’, and 

19 (B) by adding at the end the following new 

20 paragraph: 

21 ‘‘(6) POLITICAL INTERVENTION.—The term 

22 ‘political intervention’ has the meaning given to such 

23 term by section 4956.’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to contributions made in taxable 

3 years beginning after December 31, 2020. 

4 SEC. 3. POLITICAL INTERVENTION. 

5 (a) DISCLOSURE REQUIREMENT.—Section 

6 6104(d)(3) of the Internal Revenue Code of 1986 is 

7 amended by adding at the end the following new subpara8 graph: 

9 ‘‘(C) CERTAIN 501(C)(4) ORGANIZATIONS

10 MUST DISCLOSE CERTAIN DONORS.—In the case 

11 of an organization described in section 

12 501(c)(4) that spends funds on political inter13 vention (as defined in section 4956), such orga14 nization shall be required to disclose the name 

15 and address of any contributor donating $5,000 

16 or more to such organization, and such infor17 mation shall be made open to public inspection 

18 in the manner described in subsection 

19 (a)(1)(A).’’. 

20 (b) POLITICAL INTERVENTION DEFINED.—Sub21 chapter C of chapter 42 of subtitle D of the Internal Rev22 enue Code of 1986 is amended by adding at the end the 

23 following new section: 


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1 ‘‘SEC. 4956. POLITICAL INTERVENTION. 

2 ‘‘(a) POLITICAL INTERVENTION DEFINED.—For pur3 poses of this section, the term ‘political intervention’ 

4 means (except as provided in subsection (b)), with respect 

5 to activities conducted by an organization in relation to 

6 Federal, State, local, and foreign election campaigns of 

7 candidates for public office— 

8 ‘‘(1) express advocation— 

9 ‘‘(A) for the election, defeat, nomination, 

10 or recall of a political candidate, 

11 ‘‘(B) for the election or defeat of can12 didates affiliated with a specific political party, 

13 ‘‘(C) that voters select candidates for sup14 port or opposition based on one or more criteria 

15 that clearly distinguish certain candidates from 

16 other candidates, or 

17 ‘‘(D) the making of contributions to a can18 didate’s campaign, a political party, or (unless 

19 the contribution is restricted so that it must not 

20 be used to support political intervention) any 

21 other political organization within the meaning 

22 of section 527(e)(1), 

23 ‘‘(2) communication to any part of the elec24 torate, other than an express advocacy communica25 tion within the meaning of clause (i), if the commu26 nication— 


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1 ‘‘(A) refers to a political candidate, and 

2 ‘‘(B) reflects a view on such candidate, and 

3 ‘‘(3) political use of resources. 

4 ‘‘(b) EXCEPTIONS.—A communication described in 

5 subsection (a) shall not constitute political intervention 

6 if— 

7 ‘‘(1) it does not consist of paid mass media ad8 vertising, and 

9 ‘‘(2) it falls under one of the following excep10 tions: 

11 ‘‘(A) COMMUNICATIONS TO INFLUENCE

12 OFFICIAL ACTION.—Commentary on a public of13 ficial that has a direct, limited, and reasonable 

14 relationship to specific actions the official may 

15 yet perform within his or her current term of 

16 office without mention of any election or voting 

17 in an election, or of the official’s candidacy or 

18 opponent. 

19 ‘‘(B) VOTER EDUCATION.—Voter education 

20 activities or the dissemination of materials that 

21 compare two or more candidates for an office, 

22 including materials disclosing the views of the 

23 organization on political issues, if the commu24 nication consists solely of content in which the 

25 time, text, or space is offered in equal shares to 


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1 each of the participating candidates, and the or2 ganization’s share of content is no greater than 

3 the share available to any of the participating 

4 candidates. The opportunity to participate, in5 cluding a full description of the opportunity and 

6 of the organization’s share of the content, if 

7 any, must be given to all candidates meeting an 

8 objective threshold of viability for nomination or 

9 election to the office at least 72 hours in ad10 vance of the final preparation of the commu11 nication. 

12 ‘‘(C) SELF-DEFENSE COMMUNICATIONS.— 

13 A response by the organization to a public or 

14 publicly-reported statement by a candidate or 

15 candidates that either (i) attacks the organiza16 tion itself, or (ii) comments upon a specific pub17 lic policy position that the organization has 

18 taken publicly in furtherance of its exempt pur19 pose within the prior year, or (iii) results in 

20 press inquiries to the organization that were 

21 not solicited subsequent to the candidate’s 

22 statement by the organization. The response by 

23 the organization must be educational, limited 

24 topically to addressing the candidate’s state25 ment, and as to (i) or (ii), disseminated in a 


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1 manner commensurate in medium and scale, 

2 and proximate in time, to the publicity of the 

3 candidate’s statement, and as to (iii), limited to 

4 dissemination to the requesting press organiza5 tion. 

6 ‘‘(D) PERSONAL, ORAL REMARKS AT OFFI7 CIAL MEETINGS.—Oral remarks made by any8 one other than a candidate who is present in 

9 person at an official meeting of an organization 

10 held in a single room or location, so long as— 

11 ‘‘(i) no announcement of the meeting 

12 refers to any candidate, party, election, or 

13 voting, and 

14 ‘‘(ii) a disclaimer is made to those in 

15 attendance, stating that remarks are the 

16 speaker’s personal opinion and are not 

17 made on behalf of the organization. 

18 This exception covers only oral remarks made 

19 by and to persons in attendance, and not any 

20 other form of communication or redistribution 

21 of those remarks, whether written, electronic, 

22 recorded, broadcast, or otherwise transmitted. 

23 ‘‘(c) DEFINITIONS.—For purposes of this section— 

24 ‘‘(1) CANDIDATE.—The term ‘candidate’ means 

25 a person who offers himself or herself for election to 


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1 public office or whose election the person conducting 

2 the activity or making the expenditure in question 

3 expressly proposes, supports, or opposes. 

4 ‘‘(2) ELECTION.—The term ‘election’ means a 

5 process culminating in a vote by the public to deter6 mine whether a candidate will serve in a public of7 fice, including primary, general, special, and runoff 

8 elections, nominations by caucus, convention, or 

9 other means, and recall and confirmation votes. 

10 ‘‘(3) PAID MASS MEDIA ADVERTISING.— 

11 ‘‘(A) IN GENERAL.—The term ‘paid mass 

12 media advertising’ means communication to the 

13 general public placed for a fee on one of the fol14 lowing media operated by another person: a 

15 broadcast, cable, or satellite facility, newspaper, 

16 magazine, outdoor advertising facility, mass 

17 mailing service, telephone bank, or another per18 son’s website or internet communications serv19 ice. 

20 ‘‘(B) MASS MAILING.—The term ‘mass 

21 mailing’ means— 

22 ‘‘(i) a mailing by United States mail 

23 or facsimile, 

24 ‘‘(ii) of more than 500 pieces of mail 

25 matter of an identical or substantially 


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1 similar nature within any 30-day period, 

2 and 

3 ‘‘(iii) that is not voter education mate4 rials. 

5 ‘‘(4) POLITICAL USE OF RESOURCES.—The 

6 term ‘political use of resources’— 

7 ‘‘(A) means— 

8 ‘‘(i) the provision any of an organiza9 tion’s resources, tangible or intangible, in10 cluding monetary or in-kind, goods, serv11 ices, or facilities, by gift, loan, sale, rental, 

12 or any other method of transfer to another 

13 person or entity, if— 

14 ‘‘(I) the transferee uses such re15 sources to support or oppose any can16 didate’s election to public office, 

17 ‘‘(II) such use is reasonably fore18 seeable, and 

19 ‘‘(III) if the transferor has not 

20 taken reasonable steps to prevent such 

21 use, 

22 ‘‘(ii) any other transfer that is a re23 portable contribution related to one or 

24 more candidates for elective public office, 

25 to a political party, or (unless the transfer 


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1 is restricted so that it must not be used to 

2 support political intervention) to any other 

3 political organization within the meaning 

4 of section 527(e)(1), and 

5 ‘‘(iii) any other use of an organiza6 tion’s resources in support of or opposition 

7 to a candidate, if not specifically allowed 

8 under a Revenue Ruling or other Federal 

9 tax authority, and 

10 ‘‘(B) does not include a transfer that is— 

11 ‘‘(i) made in a transaction in which 

12 the fair market value of goods or services 

13 provided by the organization does not ex14 ceed the value of the consideration received 

15 in exchange, 

16 ‘‘(ii) similar to other transactions con17 ducted by the organization, and 

18 ‘‘(iii) without preference for or against 

19 any candidate. 

20 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 

21 such regulations and other guidance as may be appro22 priate or necessary to carry out the purposes of this sec23 tion.’’. 

24 (c) CONFORMING AMENDMENTS.— 


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1 (1) The heading for subchapter C of chapter 42 

2 of such Code is amended by adding at the end the 

3 following: ‘‘; Political Intervention’’. 

4 (2) The table of sections for such subchapter C 

5 is amended by adding at the end the following: 

‘‘Sec. 4956. Political intervention.’’. 

6 (3) The item in the table of subchapters of such 

7 chapter 42 relating to subchapter C is amended to 

8 read as follows: 

‘‘SUBCHAPTER C. POLITICAL EXPENDITURES OF SECTION 501(c)(3) 

ORGANIZATIONS; POLITICAL INTERVENTION.’’. 

9 (d) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to contributions made in taxable 

11 years beginning after December 31, 2020. 

Æ 


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