Spotlight Act

To amend the Internal Revenue Code of 1986 to require certain tax-exempt organizations to include on annual returns the names and addresses of substantial contributors, and for other purposes. 1. Short title This Act may be cited as the Spotlight Act 2. Inclusion of contributor information on annual returns of certain organizations (a) Repeal of Revenue Procedure Revenue Procedure 2018–38 shall have no force and effect. (b) Inclusion of contributor information (1) Social welfare organizations Section 6033(f)(1) (5), paragraphs (2) Labor organizations and business leagues Section 6033 of such Code is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection: (n) Additional requirements for organizations described in subsections (c)(5) (c)(6) Every organization which is described in paragraph (5) or (6) of section 501(c) and which is subject to the requirements of subsection (a) shall include on the return required under subsection (a) the information referred to in subsection (b)(5). . (3) Effective date The amendments made by this subsection shall apply to returns required to be filed for taxable years ending on or after December 31, 2018. (c) Modification to discretionary exceptions Section 6033(a)(3)(B) (B) Discretionary exceptions (i) In general Paragraph (1) shall not apply to any organization if the Secretary made a determination under this subparagraph before July 16, 2018, that such filing is not necessary to the efficient administration of the internal revenue laws. (ii) Recommendations for other exceptions The Secretary may recommend to Congress that Congress relieve any organization required under paragraph (1) to file an information return from filing such a return if the Secretary determines that such filing does not advance a national security, law enforcement, or tax administration purpose. . (d) Disclosure of information (1) In general Section 6104(b) Nothing in this subsection shall authorize the Secretary to disclose the name and address of any contributor to any organization In the case of any organization described in paragraph (4), (5), or (6) of section 501(c) which files a return under section 6033, such information shall include the name and address of any contributor to such organization which is required to be included on the return, but nothing in this subsection shall authorize the Secretary to disclose the name or address of any contributor to any other organization (2) Conforming amendment Section 6104(d)(3)(A) of such Code is amended by striking the first sentence and inserting the following: In the case of any organization described in paragraph (4), (5), or (6) of section 501(c) which files a return under section 6033, any copies of annual returns provided under paragraph (1) shall include information relating to the name and address of any contributor to such organization, but nothing in such paragraph shall require the disclosure of the name or address of any contributor to any other organization (other than a private foundation (within the meaning of section 509(a)) or political organization exempt from taxation under section 527). (3) Effective date The amendments made by this subsection shall apply to returns required to be filed for taxable years ending after December 31, 2017.

Summary: Spotlight Act This bill repeals an Internal Revenue Service (IRS) revenue procedure (Rev. Proc. 2018-38) that exempts certain tax-exempt organizations that are not 501(c)(3) organizations from the requirement to report the names and addresses of substantial contributors (persons who contribute more than $5,000 per year) on information returns that are filed with the IRS. The bill requires tax-exempt organizations that fall under sections 501(c)(4), 501(c)(5), and 501(c)(6) of the Internal Revenue Code (e.g., social welfare organizations, labor organizations, business leagues) to disclose the names and addresses of all substantial contributors on their returns. The information must also be made available to the public. The bill also eliminates the authority of the IRS to provide exceptions to the disclosure requirements for tax-exempt organizations. This provision does not apply to determinations made by the IRS before July 16, 2018.