‘‘(I) information regarding each
separate expenditure from and con-
tribution to such organization, and
‘‘(II) information regarding the
person who makes such contribution
or receives such expenditure,
which would otherwise be required to be
reported under this section, and
‘‘(iii) with respect to which the reports
referred to in clause (ii) are (I) made pub-
lic by the agency with which such reports
are filed, and (II) made publicly available
for inspection by the organization in the
manner described in section 6104(d).
‘‘(B) CERTAIN STATE LAW DIFFERENCES
DISREGARDED.—An organization shall not be
treated as failing to meet the requirements of
subparagraph (A)(ii) solely by reason of 1 or
more of the following:
‘‘(i) The minimum amount of any ex-
penditure or contribution required to be re-
ported under State law is not more than
$300 greater than the minimum amount
required to be reported under subsection
(j).
‘‘(ii) The State law does not require
the organization to identify 1 or more of
the following:
‘‘(I) The employer of any person
who makes contributions to the orga-
nization.
‘‘(II) The occupation of any per-
son who makes contributions to the
organization.
‘‘(III) The employer of any per-
son who receives expenditures from
the organization.
‘‘(IV) The occupation of any per-
son who receives expenditures from
the organization.
‘‘(V) The purpose of any expendi-
ture of the organization.
‘‘(VI) The date any contribution
was made to the organization.
‘‘(VII) The date of any expendi-
ture of the organization.
‘‘(C) DE MINIMIS ERRORS.—An organiza-
tion shall not fail to be treated as a qualified
State or local political organization solely be-
cause such organization makes de minimis er-
rors in complying with the State reporting re-
quirements and the public inspection require-
ments described in subparagraph (A) as long as
the organization corrects such errors within a
reasonable period after the organization be-
comes aware of such errors.
‘‘(D) PARTICIPATION
OF
FEDERAL
CAN-
DIDATE OR OFFICE HOLDER.—The term ‘quali-
fied State or local political organization’ shall
not include any organization otherwise de-
scribed in subparagraph (A) if a candidate for
nomination or election to Federal elective public
office or an individual who holds such office—
‘‘(i) controls or materially participates
in the direction of the organization,
‘‘(ii) solicits contributions to the orga-
nization (unless the Secretary determines
that such solicitations resulted in de mini-
mis contributions and were made without
the prior knowledge and consent, whether
explicit or implicit, of the organization or
its officers, directors, agents, or employ-
ees), or
‘‘(iii) directs, in whole or in part, dis-
bursements by the organization.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the amend-
ments made by Public Law 106–230.
SEC. 3. EXEMPTION FROM ANNUAL RETURN REQUIRE-
MENTS.
(a) INCOME TAX RETURNS REQUIRED ONLY FOR
POLITICAL
ORGANIZATION
TAXABLE
INCOME.—Para-
graph (6) of section 6012(a) of the Internal Revenue Code
of 1986 (relating to persons required to make returns of
income) is amended by striking ‘‘or which has’’ and all
that follows through ‘‘section)’’.
(b) INCOME TAX RETURNS NOT SUBJECT TO DIS-
CLOSURE.—
(1) DISCLOSURE
BY
THE
SECRETARY.—Sub-
section (b) of section 6104 of such Code (relating to
disclosure by the Secretary of annual information re-
turns) is amended by striking ‘‘6012(a)(6),’’.
(2) PUBLIC
INSPECTION.—Subsection (d) of
section 6104 of such Code (relating to public inspec-
tion of certain annual returns) is amended—
(A) in paragraph (1)(A)(i) by striking ‘‘or
section 6012(a)(6) (relating to returns by polit-
ical organizations)’’, and
(B) in subparagraph (2) by striking ‘‘or
section 6012(a)(6)’’.
(c) INFORMATION RETURNS.—Subsection (g) of sec-
tion 6033 of such Code (relating to returns required by
political organizations) is amended to read as follows:
‘‘(g) RETURNS REQUIRED BY POLITICAL ORGANIZA-
TIONS.—
‘‘(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 polit-
ical organization (as defined in section 527(e)(5)),
the preceding sentence shall be applied by sub-
stituting ‘$100,000’ for ‘$25,000’.
‘‘(2) ANNUAL
RETURNS.—Political organiza-
tions 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 ex-
empt 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 sec-
tion 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 Elec-
tion Campaign Act of 1971) of a candidate for
Federal office,
‘‘(D) which is a national committee (as de-
fined 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 cam-
paign 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 Sec-
retary may relieve any organization required under
paragraph (2) to file an information return from fil-
ing such a return if the Secretary determines that
such filing is not necessary to the efficient adminis-
tration of the internal revenue laws.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the amend-
ments made by Public Law 106–230.
SEC. 4. NOTIFICATION OF INTERACTION OF REPORTING
REQUIREMENTS.
(a) IN GENERAL.—The Secretary of the Treasury, in
consultation with the Federal Election Commission, shall
publicize—
(1) the effect of the amendments made by this
Act, and
(2) the interaction of requirements to file a no-
tification or report under section 527 of the Internal
Revenue Code of 1986 and reports under the Fed-
eral Election Campaign Act of 1971.
(b) INFORMATION.—Information provided under sub-
section (a) shall be included in any appropriate form, in-
struction, notice, or other guidance issued to the public
by the Secretary of the Treasury or the Federal Election
Commission regarding reporting requirements of political
organizations (as defined in section 527 of the Internal
Revenue Code of 1986) or reporting requirements under
the Federal Election Campaign Act of 1971.
SEC. 5. WAIVER OF FILING AMOUNTS.
(a) WAIVER OF FILING AMOUNTS.—Section 527 of
the Internal Revenue Code of 1986 is amended by adding
at the end the following:
‘‘(k) AUTHORITY TO WAIVE.—The Secretary may
waive all or any portion of the—
‘‘(1) tax assessed on an organization by reason
of the failure of the organization to comply with the
requirements of subsection (i), or
‘‘(2) amount imposed under subsection (j) for a
failure to comply with the requirements thereof,
on a showing that such failure was due to reasonable cause
and not due to willful neglect.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to any tax assessed or amount
imposed after June 30, 2000.
SEC. 6. MODIFICATIONS TO SECTION 527 ORGANIZATION
DISCLOSURE PROVISIONS.
(a) UNSEGREGATED FUNDS NOT TO AVOID TAX.—
Paragraph (4) of section 527(i) of the Internal Revenue
Code of 1986 (relating to failure to notify) is amended
by adding at the end the following new sentence: ‘‘For
purposes of the preceding sentence, the term ‘exempt func-
tion income’ means any amount described in a subpara-
graph of subsection (c)(3), whether or not segregated for
use for an exempt function.’’.
(b) PROCEDURES FOR ASSESSMENT AND COLLEC-
TION OF AMOUNTS.—Paragraph (1) of section 527(j) of
the Internal Revenue Code of 1986 (relating to required
disclosure of expenditures and contributions) is amended
by adding at the end the following new sentence: ‘‘For
purposes of subtitle F, the amount imposed by this para-
graph shall be assessed and collected in the same manner
as penalties imposed by section 6652(c).’’.
(c) DUPLICATE
WRITTEN
FILINGS
NOT
RE-
QUIRED.—Subparagraph (A) of section 527(i)(1) of the
Internal Revenue Code of 1986 is amended by striking ‘‘,
electronically and in writing,’’ and inserting ‘‘electroni-
cally’’.
(d) APPLICATION
OF FRAUD PENALTY.—Section
7207 of the Internal Revenue Code of 1986 (relating to
fraudulent returns, statements, and other documents) is
amended by striking ‘‘pursuant to subsection (b) of section
6047 or pursuant to subsection (d) of section 6104’’ and
inserting ‘‘pursuant to section 6047(b), section 6104(d),
or subsection (i) or (j) of section 527’’.
(e) CONTENTS AND FILING OF REPORT.—
(1) CONTENTS.—Section 527(j)(3) of the Inter-
nal Revenue Code of 1986 (relating to contents of
report) is amended—
(A) by inserting ‘‘, date, and purpose’’
after ‘‘The amount’’ in subparagraph (A), and
(B) by inserting ‘‘and date’’ after ‘‘the
amount’’ in subparagraph (B).
(2) ELECTRONIC
FILING.—Section 527(j) of
such Code is amended by adding at the end the fol-
lowing new paragraph:
‘‘(7) ELECTRONIC
FILING.—Any report re-
quired under paragraph (2) with respect to any cal-
endar year shall be filed in electronic form if the or-
ganization has, or has reason to expect to have, con-
tributions exceeding $50,000 or expenditures exceed-
ing $50,000 in such calendar year.’’.
(3) ELECTRONIC FILING AND ACCESS OF RE-
QUIRED DISCLOSURES.—Section 527 of such Code,
as amended by section 5(a), is amended by redesig-
nating subsection (k) as subsection (l) and by insert-
ing after subsection (j) the following new subsection:
‘‘(k) PUBLIC AVAILABILITY OF NOTICES AND RE-
PORTS.—
‘‘(1) IN GENERAL.—The Secretary shall make
any notice described in subsection (i)(1) or report
described in subsection (j)(7) available for public in-
spection on the Internet not later than 48 hours
after such notice or report has been filed (in addi-
tion to such public availability as may be made
under section 6104(d)(7)).
‘‘(2) ACCESS.—The Secretary shall make the
entire database of notices and reports which are
made available to the public under paragraph (1)
searchable by the following items (to the extent the
items are required to be included in the notices and
reports):
‘‘(A) Names, States, zip codes, custodians
of records, directors, and general purposes of
the organizations.
‘‘(B) Entities related to the organizations.
‘‘(C) Contributors to the organizations.
‘‘(D) Employers of such contributors.
‘‘(E) Recipients of expenditures by the or-
ganizations.
‘‘(F) Ranges of contributions and expendi-
tures.
‘‘(G) Time periods of the notices and re-
ports.
Such database shall be downloadable.’’.
(f) CONTENTS OF NOTICE.—Section 527(i)(3) of the
Internal Revenue Code of 1986 (relating to contents of
notice) is amended by striking ‘‘and’’ at the end of sub-
paragraph (D), by redesignating subparagraph (E) as sub-
paragraph (F), and by inserting after subparagraph (D)
the following new subparagraph:
‘‘(E) whether the organization intends to
claim an exemption from the requirements of
subsection (j) or section 6033, and’’.
(g) TIMING
OF NOTICE
IN CASE
OF MATERIAL
CHANGE.—
(1) IN GENERAL.—Subparagraph (B) of section
527(i)(1) of the Internal Revenue Code of 1986 (re-
lating to general notification requirement) is amend-
ed by inserting ‘‘or, in the case of any material
change in the information required under paragraph
(3), for the period beginning on the date on which
the material change occurs and ending on the date
on which such notice is given’’ after ‘‘given’’.
(2) TIME TO GIVE NOTICE.—Section 527(i)(2)
of the Internal Revenue Code of 1986 (relating to
time to give notice) is amended by inserting ‘‘or, in
the case of any material change in the information
required under paragraph (3), not later than 30
days after such material change’’ after ‘‘estab-
lished’’.
(3) EFFECT OF FAILURE.—Paragraph (4) of
section 527(i) of the Internal Revenue Code of 1986
(relating to effect of failure) is amended by inserting
before the period at the end the following: ‘‘or, in
the case of a failure relating to a material change,
by taking into account such income and deductions
only during the period beginning on the date on
which the material change occurs and ending on the
date on which notice is given under this subsection’’.
(h) EFFECTIVE DATES.—
(1) SUBSECTIONS (a) AND (b).—The amend-
ments made by subsections (a) and (b) shall apply
to failures occurring on or after the date of the en-
actment of this Act.
(2) SUBSECTION (c).—The amendments made
by subsection (c) shall take effect as if included in
the amendments made by Public Law 106–230.
(3) SUBSECTION (d).—The amendment made
by subsection (d) shall apply to reports and notices
required to be filed on or after the date of the enact-
ment of this Act.
(4) SUBSECTIONS (e)(1) AND (f).—The amend-
ments made by subsections (e)(1) and (f) shall apply
to reports and notices required to be filed more than
30 days after the date of the enactment of this Act.
(5) SUBSECTIONS
(e)(2) 
AND
(e)(3).—The
amendments made by subsections (e)(2) and (e)(3)
shall apply to reports required to be filed on or after
June 30, 2003.
(6) SUBSECTION (g).—
(A) IN GENERAL.—The amendments made
by subsection (g) shall apply to material
changes on or after the date of the enactment
of this Act.
(B) TRANSITION RULE.—In the case of a
material change occurring during the 30-day
period beginning on the date of the enactment
of this Act, a notice under section 527(i) of the
Internal Revenue Code of 1986 (as amended by
this Act) shall not be required to be filed under
such section before the later of—
(i) 30 days after the date of such ma-
terial change, or
(ii) 45 days after the date of the en-
actment of this Act.
SEC. 7. EFFECT OF AMENDMENTS ON EXISTING DISCLO-
SURES.
Notices, reports, or returns that were required to be
filed with the Secretary of the Treasury before the date
of the enactment of the amendments made by this Act
and that were disclosed by the Secretary of the Treasury
consistent with the law in effect at the time of disclosure
shall remain subject on and after such date to the disclo-
sure provisions of section 6104 of the Internal Revenue
Code of 1986.
Passed the House of Representatives October 16,
2002.
Attest:
Clerk.