(D), and (E) as subparagraphs (D), (E), and (F), respec-
tively, and by inserting after subparagraph (B) the fol-
lowing new subparagraph:
‘‘(C) to any organization which is an ex-
empt State or local political organization,’’.
(b) EXEMPT STATE OR LOCAL POLITICAL ORGANIZA-
TION.—Subsection (e) of section 527 of the Internal Rev-
enue Code of 1986 (relating to other definitions) is
amended by adding at the end the following new para-
graph:
‘‘(5) EXEMPT STATE OR LOCAL POLITICAL OR-
GANIZATION.—
‘‘(A) IN
GENERAL.—The term ‘exempt
State or local political organization’ means a
political organization which—
‘‘(i) does not engage in any exempt
function other than solely for the purposes
of influencing or attempting to influence
the selection, nomination, election, or ap-
pointment of any individual to any State or
local public office or office in a State or
local political organization,
‘‘(ii) is subject to State requirements
to report (and it so reports)—
‘‘(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 made public
by the agency with which such reports are
filed and are publicly available for inspec-
tion in a manner similar to that required
by section 6104(d)(1).
‘‘(B) CERTAIN FAILURES 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 fol-
lowing:
‘‘(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 of any contribu-
tion to or expenditure from the orga-
nization.
‘‘(iii) The organization makes de mini-
mis errors in complying with State law re-
quirements as long as the organization cor-
rects the errors within a reasonable period
after being notified of such errors.
‘‘(C) PARTICIPATION
OF
FEDERAL
CAN-
DIDATE
OR
OFFICE
HOLDER.—The term ‘ex-
empt 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 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, or
‘‘(iii) directs, in whole or in part, dis-
bursements by the organization.’’.
(c) ANNUAL RETURN REQUIREMENTS.—
(1) INCOME
TAX
RETURNS
REQUIRED
ONLY
FOR POLITICAL ORGANIZATION TAXABLE INCOME.—
Paragraph (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 ‘‘sec-
tion)’’.
(2) INFORMATION RETURNS.—Subsection (g) of
section 6033 of such Code (relating to returns re-
quired by political organizations) is amended—
(A) by striking ‘‘political organization re-
quired 
to 
file 
a 
return 
under 
section
6012(a)(6)’’ and inserting ‘‘political organiza-
tion (with the meaning of section 527, other
than a political committee of a State or local
candidate) which has gross receipts of $25,000
or more for the taxable year’’, and
(B) by adding at the end the following new
sentence:
‘‘In the case of an exempt State or local political or-
ganization (as defined in section 527(e)(5)), the preceding
sentence shall be applied by substituting ‘$100,000’ for
‘$25,000’.’’.
(3) AUTHORIZATION TO MODIFY INFORMATION
RETURNS.—The Secretary shall review for possible
modification the annual return required under sec-
tion 6033(g) of the Internal Revenue Code of 1986.
(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. 3. 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. 4. WAIVER OF PENALTIES.
(a) WAIVER OF FILING PENALTIES.—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 give notice
under subsection (i), or
‘‘(2) penalty imposed under subsection (j) for a
failure to file a report,
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 penalty
imposed after June 30, 2000.
SEC. 5. TECHNICAL CORRECTIONS TO SECTION 527 ORGA-
NIZATION 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 PENALTY.—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 penalty 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.—
(1) Subparagraph (A) of section 527(i)(1) of
the Internal Revenue Code of 1986 is amended by
striking ‘‘, electronically and in writing,’’ and insert-
ing ‘‘electronically’’.
(2) Subsection (i) of section 527 of such Code
is amended by adding at the end the following new
paragraph:
‘‘(7) ELECTRONIC FILING.—The Secretary shall
develop procedures for submission in electronic form
of notices required to be filed under this subsection
and reports required to be filed under subsection
(j).’’.
(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 OF REPORT.—Section 527(j)(3) of the
Internal Revenue Code of 1986 (relating to contents of
report) is amended—
(1) by inserting ‘‘, date, and purpose’’ after
‘‘The amount’’ in subparagraph (A), and
(2) by inserting ‘‘and date’’ after ‘‘the amount’’
in subparagraph (B).
(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 NOTICES.—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 para-
graph (3), not later than 30 days after such material
change’’ after ‘‘established’’.
(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) SUBSECTIONS
(d), (e), 
AND
(f).—The
amendments made by subsections (d), (e), and (f)
shall apply to reports or notices filed on or after the
date of the enactment of this Act.
(4) SUBSECTION (g).—The amendments made
by subsection (g) shall apply to material changes on
or after the date of the enactment of this Act.
Æ