106TH CONGRESS
2D SESSION
H. R. 4762
AN ACT
To amend the Internal Revenue Code of 1986 to
require 527 organizations to disclose their polit-
ical activities.
106TH CONGRESS
2D SESSION
H. R. 4762
AN ACT
To amend the Internal Revenue Code of 1986 to require
527 organizations to disclose their political activities.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. REQUIRED NOTIFICATION OF SECTION 527 STA-
TUS.
(a) IN GENERAL.—Section 527 of the Internal Rev-
enue Code of 1986 (relating to political organizations) is
amended by adding at the end the following new sub-
section:
‘‘(i) ORGANIZATIONS
MUST
NOTIFY
SECRETARY
THAT THEY ARE SECTION 527 ORGANIZATIONS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (5), an organization shall not be treated as an
organization described in this section—
‘‘(A) unless it has given notice to the Sec-
retary, electronically and in writing, that it is to
be so treated, or
‘‘(B) if the notice is given after the time
required under paragraph (2), the organization
shall not be so treated for any period before
such notice is given.
‘‘(2) TIME TO GIVE NOTICE.—The notice re-
quired under paragraph (1) shall be transmitted not
later than 24 hours after the date on which the or-
ganization is established.
‘‘(3) CONTENTS
OF
NOTICE.—The notice re-
quired under paragraph (1) shall include informa-
tion regarding—
‘‘(A) the name and address of the organi-
zation (including any business address, if dif-
ferent) and its electronic mailing address,
‘‘(B) the purpose of the organization,
‘‘(C) the names and addresses of its offi-
cers, highly compensated employees, contact
person, custodian of records, and members of
its Board of Directors,
‘‘(D) the name and address of, and rela-
tionship to, any related entities (within the
meaning of section 168(h)(4)), and
‘‘(E) such other information as the Sec-
retary may require to carry out the internal
revenue laws.
‘‘(4) EFFECT OF FAILURE.—In the case of an
organization failing to meet the requirements of
paragraph (1) for any period, the taxable income of
such organization shall be computed by taking into
account any exempt function income (and any de-
ductions directly connected with the production of
such income).
‘‘(5) EXCEPTIONS.—This subsection shall not
apply to any organization—
‘‘(A) to which this section applies solely by
reason of subsection (f)(1), or
‘‘(B) which reasonably anticipates that it
will not have gross receipts of $25,000 or more
for any taxable year.
‘‘(6) COORDINATION
WITH
OTHER
REQUIRE-
MENTS.—This subsection shall not apply to any per-
son required (without regard to this subsection) to
report under the Federal Election Campaign Act of
1971 (2 U.S.C. 431 et seq.) as a political com-
mittee.’’.
(b) DISCLOSURE REQUIREMENTS.—
(1) INSPECTION AT INTERNAL REVENUE SERV-
ICE OFFICES.—
(A) IN GENERAL.—Section 6104(a)(1)(A)
of the Internal Revenue Code of 1986 (relating
to 
public 
inspection 
of 
applications) 
is
amended—
(i) by inserting ‘‘or a political organi-
zation is exempt from taxation under sec-
tion 527 for any taxable year’’ after ‘‘tax-
able year’’,
(ii) by inserting ‘‘or notice of status
filed by the organization under section
527(i)’’ before ‘‘, together’’,
(iii) by inserting ‘‘or notice’’ after
‘‘such application’’ each place it appears,
(iv) by inserting ‘‘or notice’’ after
‘‘any application’’,
(v) by inserting ‘‘for exemption from
taxation under section 501(a)’’ after ‘‘any
organization’’ in the last sentence, and
(vi) by inserting ‘‘OR 527’’ after ‘‘SEC-
TION 501’’ in the heading.
(B) 
CONFORMING
AMENDMENT.—The
heading for section 6104(a) of such Code is
amended by inserting ‘‘OR NOTICE OF STATUS’’
before the period.
(2) INSPECTION OF NOTICE ON INTERNET AND
IN
PERSON.—Section 6104(a) of such Code is
amended by adding at the end the following new
paragraph:
‘‘(3) INFORMATION AVAILABLE ON INTERNET
AND IN PERSON.—
‘‘(A) IN
GENERAL.—The Secretary shall
make publicly available, on the Internet and at
the offices of the Internal Revenue Service—
‘‘(i) a list of all political organizations
which file a notice with the Secretary
under section 527(i), and
‘‘(ii) the name, address, electronic
mailing address, custodian of records, and
contact person for such organization.
‘‘(B) TIME TO MAKE INFORMATION AVAIL-
ABLE.—The Secretary shall make available the
information required under subparagraph (A)
not later than five business days after the Sec-
retary receives a notice from a political organi-
zation under section 527(i).’’.
(3) INSPECTION
BY
COMMITTEE
OF
CON-
GRESS.—Section 6104(a)(2) of such Code is amend-
ed by inserting ‘‘or notice of status of any political
organization which is exempt from taxation under
section 527 for any taxable year’’ after ‘‘taxable
year’’.
(4) PUBLIC INSPECTION MADE AVAILABLE BY
ORGANIZATION.—Section 6104(d) of such Code (re-
lating to public inspection of certain annual returns
and applications for exemption) is amended—
(A) by striking ‘‘AND APPLICATIONS FOR
EXEMPTION’’ and inserting ‘‘, APPLICATIONS
FOR EXEMPTION, AND NOTICES OF STATUS’’ in
the heading,
(B) by inserting ‘‘or notice of status under
section 527(i)’’ after ‘‘section 501’’ and by in-
serting ‘‘or any notice materials’’ after ‘‘mate-
rials’’ in paragraph (1)(A)(ii),
(C) by inserting or ‘‘or such notice mate-
rials’’ after ‘‘materials’’ in paragraph (1)(B),
and
(D) by adding at the end the following new
paragraph:
‘‘(6) NOTICE
MATERIALS.—For purposes of
paragraph (1), the term ‘notice materials’ means the
notice of status filed under section 527(i) and any
papers submitted in support of such notice and any
letter or other document issued by the Internal Rev-
enue Service with respect to such notice.’’.
(c) 
FAILURE
TO
MAKE
PUBLIC.—Section
6652(c)(1)(D) of the Internal Revenue Code of 1986 (re-
lating to public inspection of applications for exemption)
is amended—
(1) by inserting ‘‘or notice materials (as defined
in such section)’’ after ‘‘section)’’, and
(2) by inserting ‘‘AND
NOTICE
OF
STATUS’’
after ‘‘EXEMPTION’’ in the heading.
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), the amendments made by this
section shall take effect on the date of the enactment
of this section.
(2) ORGANIZATIONS ALREADY IN EXISTENCE.—
In the case of an organization established before the
date of the enactment of this section, the time to file
the notice under section 527(i)(2) of the Internal
Revenue Code of 1986, as added by this section,
shall be 30 days after the date of the enactment of
this section.
(3) INFORMATION AVAILABILITY.—The amend-
ment made by subsection (b)(2) shall take effect on
the date that is 45 days after the date of the enact-
ment of this section.
SEC. 2. DISCLOSURES BY POLITICAL ORGANIZATIONS.
(a) REQUIRED
DISCLOSURE
OF
527
ORGANIZA-
TIONS.—Section 527 of the Internal Revenue Code of
1986 (relating to political organizations), as amended by
section 1(a), is amended by adding at the end the fol-
lowing new section:
‘‘(j) REQUIRED DISCLOSURE OF EXPENDITURES AND
CONTRIBUTIONS.—
‘‘(1) PENALTY FOR FAILURE.—In the case of—
‘‘(A) a failure to make the required disclo-
sures under paragraph (2) at the time and in
the manner prescribed therefor, or
‘‘(B) a failure to include any of the infor-
mation required to be shown by such disclo-
sures or to show the correct information,
there shall be paid by the organization an amount
equal to the rate of tax specified in subsection (b)(1)
multiplied by the amount to which the failure re-
lates.
‘‘(2) REQUIRED DISCLOSURE.—A political orga-
nization which accepts a contribution, or makes an
expenditure, for an exempt function during any cal-
endar year shall file with the Secretary either—
‘‘(A)(i) in the case of a calendar year in
which a regularly scheduled election is held—
‘‘(I) quarterly reports, beginning with
the first quarter of the calendar year in
which a contribution is accepted or expend-
iture is made, which shall be filed not later
than the fifteenth day after the last day of
each calendar quarter, except that the re-
port for the quarter ending on December
31 of such calendar year shall be filed not
later than January 31 of the following cal-
endar year,
‘‘(II) a pre-election report, which shall
be filed not later than the twelfth day be-
fore (or posted by registered or certified
mail not later than the fifteenth day be-
fore) any election with respect to which the
organization makes a contribution or ex-
penditure, and which shall be complete as
of the twentieth day before the election,
and
‘‘(III) a post-general election report,
which shall be filed not later than the thir-
tieth day after the general election and
which shall be complete as of the twentieth
day after such general election, and
‘‘(ii) in the case of any other calendar
year, a report covering the period beginning
January 1 and ending June 30, which shall be
filed no later than July 31 and a report cov-
ering the period beginning July 1 and ending
December 31, which shall be filed no later than
January 31 of the following calendar year, or
‘‘(B) monthly reports for the calendar
year, beginning with the first month of the cal-
endar year in which a contribution is accepted
or expenditure is made, which shall be filed not
later than the twentieth day after the last day
of the month and shall be complete as if the
during the calendar year and the amount of the
contribution.
Any expenditure or contribution disclosed in a pre-
vious reporting period is not required to be included
in the current reporting period.
‘‘(4) CONTRACTS TO SPEND OR CONTRIBUTE.—
For purposes of this subsection, a person shall be
treated as having made an expenditure or contribu-
tion if the person has contracted or is otherwise obli-
gated to make the expenditure or contribution.
‘‘(5) COORDINATION
WITH
OTHER
REQUIRE-
MENTS.—This subsection shall not apply—
‘‘(A) to any person required (without re-
gard to this subsection) to report under the
Federal Election Campaign Act of 1971 (2
U.S.C. 431 et seq.) as a political committee,
‘‘(B) to any State or local committee of a
political party or political committee of a State
or local candidate,
‘‘(C) to any organization which reasonably
anticipates that it will not have gross receipts
of $25,000 or more for any taxable year,
‘‘(D) to any organization to which this sec-
tion applies solely by reason of subsection
(f)(1), or
‘‘(E) with respect to any expenditure which
is an independent expenditure (as defined in
section 301 of such Act).
‘‘(6) ELECTION.—For purposes of this sub-
section, the term ‘election’ means—
‘‘(A) a general, special, primary, or runoff
election for a Federal office,
‘‘(B) a convention or caucus of a political
party which has authority to nominate a can-
didate for Federal office,
‘‘(C) a primary election held for the selec-
tion of delegates to a national nominating con-
vention of a political party, or
‘‘(D) a primary election held for the ex-
pression of a preference for the nomination of
individuals for election to the office of Presi-
dent.’’.
(b) PUBLIC DISCLOSURE OF REPORTS.—
(1) IN GENERAL.—Section 6104(d) of the In-
ternal Revenue Code of 1986 (relating to public in-
spection of certain annual returns and applications
for exemption), as amended by section 1(b)(4), is
amended—
(A) by inserting ‘‘REPORTS,’’ after ‘‘RE-
TURNS,’’ in the heading,
(B) in paragraph (1)(A), by striking ‘‘and’’
at the end of clause (i), by inserting ‘‘and’’ at
the end of clause (ii), and by inserting after
clause (ii) the following new clause:
‘‘(iii) the reports filed under section
527(j) (relating to required disclosure of
expenditures and contributions) by such
organization,’’, and
(C) in paragraph (1)(B), by inserting ‘‘,
reports,’’ after ‘‘return’’.
(2) 
DISCLOSURE
OF
CONTRIBUTORS
AL-
LOWED.—Section 6104(d)(3)(A) of such Code (relat-
ing to nondisclosure of contributors, etc.) is amend-
ed by inserting ‘‘or a political organization exempt
from taxation under section 527’’ after ‘‘509(a))’’.
(3) DISCLOSURE BY INTERNAL REVENUE SERV-
ICE.—Section 6104(d) of such Code is amended by
adding at the end the following new paragraph:
‘‘(6) DISCLOSURE OF REPORTS BY INTERNAL
REVENUE SERVICE.—Any report filed by an organi-
zation under section 527(j) (relating to required dis-
closure of expenditures and contributions) shall be
made available to the public at such times and in
such places as the Secretary may prescribe.’’.
(c) 
FAILURE
TO
MAKE
PUBLIC.—Section
6652(c)(1)(C) of the Internal Revenue Code of 1986 (re-
lating to public inspection of annual returns) is
amended—
(1) by inserting ‘‘or report required under sec-
tion 527(j)’’ after ‘‘filing)’’,
(2) by inserting ‘‘or report’’ after ‘‘1 return’’,
and
(3) by inserting ‘‘AND
REPORTS’’ after ‘‘RE-
TURNS’’ in the heading.
(d) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to expenditures made and con-
tributions received after the date of the enactment of this
Act, except that such amendment shall not apply to ex-
penditures made, or contributions received, after such date
pursuant to a contract entered into on or before such date.
SEC. 3. RETURN REQUIREMENTS RELATING TO SECTION
527 ORGANIZATIONS.
(a) RETURN REQUIREMENTS.—
(1) ORGANIZATIONS REQUIRED TO FILE.—Sec-
tion 6012(a)(6) of the Internal Revenue Code of
1986 (relating to political organizations required to
make returns of income) is amended by inserting
‘‘or which has gross receipts of $25,000 or more for
the taxable year (other than an organization to
which section 527 applies solely by reason of sub-
section (f)(1) of such section)’’ after ‘‘taxable year’’.
(2) INFORMATION REQUIRED TO BE INCLUDED
ON RETURN.—Section 6033 of such Code (relating
to returns by exempt organizations) is amended by
redesignating subsection (g) as subsection (h) and
inserting after subsection (f) the following new sub-
section:
‘‘(g) RETURNS REQUIRED BY POLITICAL ORGANIZA-
TIONS.—In the case of a political organization required
to file a return under section 6012(a)(6)—
‘‘(1) such organization shall file a 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), and
‘‘(B) containing such other information as
the Secretary deems necessary to carry out the
provisions of this subsection, and
‘‘(2) subsection (a)(2)(B) (relating to discre-
tionary exceptions) shall apply with respect to such
return.’’.
(b) PUBLIC DISCLOSURE OF RETURNS.—
(1) RETURNS
MADE
AVAILABLE
BY
SEC-
RETARY.—