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‘‘(ii) INITIAL FRACTIONAL CONTRIBU-
TION.—The term ‘initial fractional con-
tribution’ means, with respect to any donor,
the first gift of an undivided portion of the
donor’s entire interest in any tangible per-
sonal property for which a deduction is al-
lowed under subsection (a) or (b).
‘‘(2) RECAPTURE
OF
DEDUCTION
IN
CERTAIN
CASES.—
‘‘(A) IN
GENERAL.—The Secretary shall
provide for the recapture of an amount equal to
the amount of any deduction allowed under this
section (plus interest) with respect to any con-
tribution of an undivided interest of a donor’s
entire interest in property in any case where
such property is not in the physical possession of
the donee during any applicable period for a pe-
riod of time which bears substantially the same
ratio to 1 year as—
‘‘(i) the percentage of the undivided in-
terest of the donee in the property (deter-
mined on the day after such contribution
was made), bears to
‘‘(ii) 100 percent.
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‘‘(B) APPLICABLE
PERIOD.—For purposes
of subparagraph (A), the term ‘applicable period’
means any 1-year period which begins on—
‘‘(i) in the year of the contribution, the
date of the contribution, and
‘‘(ii) in any subsequent calendar year,
the date which corresponds to the date de-
scribed in clause (i).
‘‘(C) ANTI-ABUSE
RULES.—The Secretary
shall prescribe such regulations as necessary to
prevent the avoidance of the purposes of this
paragraph though the transfer of any such undi-
vided interest to a third party controlled by the
donor.’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to contributions, bequests, and gifts
made after the date of the enactment of this Act.
SEC. 220. PROVISIONS RELATING TO SUBSTANTIAL AND
GROSS OVERSTATEMENTS OF VALUATIONS
OF CHARITABLE DEDUCTION PROPERTY.
(a) SUBSTANTIAL AND GROSS OVERSTATEMENTS OF
VALUATIONS OF CHARITABLE DEDUCTION PROPERTY.—
(1) IN GENERAL.—Section 6662 (relating to im-
position of accuracy-related penalties) is amended by
adding at the end the following new subsection:
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‘‘(i) SPECIAL RULES FOR CHARITABLE DEDUCTION
PROPERTY.—In the case of charitable deduction property
(as defined in section 6664(c)(3)(A))—
‘‘(1) 
the 
determination 
under 
subsection
(e)(1)(A) as to whether there is a substantial valu-
ation misstatement under chapter 1 with respect to
the value of the property shall be made by sub-
stituting ‘150 percent’ for ‘200 percent’, and
‘‘(2) 
the 
determination 
under 
subsection
(h)(2)(A)(i) as to whether there is a gross valuation
misstatement with respect to the value of the property
shall be made by substituting ‘200 percent’ for ‘400
percent’ and by substituting ‘150 percent’ for ‘200
percent’ in applying subsection (e)(1)(A) for purposes
of such determination.’’.
(2) ELIMINATION OF REASONABLE CAUSE EXCEP-
TION
FOR
GROSS
MISSTATEMENTS.—Section
6664(c)(2) (relating to reasonable cause exception for
underpayments) is amended by striking ‘‘paragraph
(1) shall not apply unless’’ and inserting ‘‘paragraph
(1) shall not apply. The preceding sentence shall not
apply to a substantial valuation overstatement under
chapter 1 if’’.
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(b) PENALTY
ON APPRAISERS WHOSE APPRAISALS
RESULT
IN
SUBSTANTIAL
OR
GROSS
VALUATION
MISSTATEMENTS.—
(1) IN GENERAL.—Part I of subchapter B of
chapter 68 (relating to assessable penalties) is amend-
ed by inserting after section 6695 the following new
section:
‘‘SEC. 
6695A. 
SUBSTANTIAL 
AND 
GROSS 
VALUATION
MISSTATEMENTS ATTRIBUTABLE TO INCOR-
RECT APPRAISALS.
‘‘(a) IMPOSITION OF PENALTY.—If—
‘‘(1) a person prepares an appraisal of the value
of property and such person knows, or reasonably
should have known, that the appraisal would be used
in connection with a return or a claim for refund,
and
‘‘(2) the claimed value of the property on a re-
turn or claim for refund which is based on such ap-
praisal 
results 
in 
a 
substantial 
valuation
misstatement under chapter 1 (within the meaning of
section 6662(e)), or a gross valuation misstatement
(within the meaning of section 6662(h)), with respect
to such property,
then such person shall pay a penalty in the amount deter-
mined under subsection (b).
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‘‘(b) AMOUNT OF PENALTY.—The amount of the pen-
alty imposed under subsection (a) on any person with re-
spect to an appraisal shall be equal to the lesser of—
‘‘(1) the greater of—
‘‘(A) 10 percent of the amount of the under-
payment (as defined in section 6664(a)) attrib-
utable to the misstatement described in sub-
section (a)(2), or
‘‘(B) $1,000, or
‘‘(2) 125 percent of the gross income received by
the person described in subsection (a)(1) from the
preparation of the appraisal.
‘‘(c) EXCEPTION.—No penalty shall be imposed under
subsection (a) if the person establishes to the satisfaction
of the Secretary that the value established in the appraisal
was more likely than not the proper value.’’.
(2) RULES APPLICABLE TO PENALTY.—Section
6696 (relating to rules applicable with respect to sec-
tions 6694 and 6695) is amended—
(A) by striking ‘‘6694 and 6695’’ each place
it appears in the text and heading thereof and
inserting ‘‘6694, 6695, and 6695A’’, and
(B) by striking ‘‘6694 or 6695’’ each place
it appears in the text and inserting ‘‘6694, 6695,
or 6695A’’.
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(3) CONFORMING AMENDMENT.—The table of sec-
tions for part I of subchapter B of chapter 68 is
amended by striking the item relating to section 6696
and inserting the following new items:
‘‘Sec. 6695A. Substantial and gross valuation misstatements attributable to incor-
rect appraisals.
‘‘Sec. 6696. Rules applicable with respect to sections 6694, 6695, and 6695A.’’.
(c) QUALIFIED APPRAISERS AND APPRAISALS.—
(1) IN GENERAL.—Subparagraph (E) of section
170(f)(11) is amended to read as follows:
‘‘(E) 
QUALIFIED
APPRAISAL
AND
AP-
PRAISER.—For purposes of this paragraph—
‘‘(i) QUALIFIED APPRAISAL.—The term
‘qualified appraisal’ means, with respect to
any property, an appraisal of such prop-
erty which—
‘‘(I) is treated for purposes of this
paragraph as a qualified appraisal
under regulations or other guidance
prescribed by the Secretary, and
‘‘(II) is conducted by a qualified
appraiser in accordance with generally
accepted appraisal standards and any
regulations or other guidance pre-
scribed under subclause (I).
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‘‘(ii) QUALIFIED
APPRAISER.—Except
as provided in clause (iii), the term ‘quali-
fied appraiser’ means an individual who—
‘‘(I) has earned an appraisal des-
ignation from a recognized professional
appraiser organization or has other-
wise met minimum education and ex-
perience requirements set forth in regu-
lations prescribed by the Secretary,
‘‘(II) regularly performs apprais-
als for which the individual receives
compensation, and
‘‘(III) meets such other require-
ments as may be prescribed by the Sec-
retary in regulations or other guid-
ance.
‘‘(iii) SPECIFIC APPRAISALS.—An in-
dividual shall not be treated as a qualified
appraiser with respect to any specific ap-
praisal unless—
‘‘(I) the individual demonstrates
verifiable education and experience in
valuing the type of property subject to
the appraisal, and
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‘‘(II) the individual has not been
prohibited from practicing before the
Internal Revenue Service by the Sec-
retary under section 330(c) of title 31,
United States Code, at any time dur-
ing the 3-year period ending on the
date of the appraisal.’’.
(2) REASONABLE CAUSE EXCEPTION.—Subpara-
graphs (B) and (C) of section 6664(c)(3) are amended
to read as follows:
‘‘(B) QUALIFIED
APPRAISAL.—The term
‘qualified appraisal’ has the meaning given such
term by section 170(f)(11)(E)(i).
‘‘(C) QUALIFIED
APPRAISER.—The term
‘qualified appraiser’ has the meaning given such
term by section 170(f)(11)(E)(ii).’’.
(d) DISCIPLINARY ACTIONS AGAINST APPRAISERS.—
Section 330(c) of title 31, United States Code, is amended
by striking ‘‘with respect to whom a penalty has been as-
sessed under section 6701(a) of the Internal Revenue Code
of 1986’’.
(e) EFFECTIVE DATES.—
(1) MISSTATEMENT PENALTIES.—Except as pro-
vided in paragraph (3), the amendments made by
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subsection (a) shall apply to returns filed after the
date of the enactment of this Act.
(2) APPRAISER
PROVISIONS.—Except as pro-
vided in paragraph (3), the amendments made by
subsections (b), (c), and (d) shall apply to appraisals
prepared with respect to returns or submissions filed
after the date of the enactment of this Act.
(3) SPECIAL RULE FOR CERTAIN EASEMENTS.—
In the case of a contribution of a qualified real prop-
erty interest which is a restriction with respect to the
exterior 
of 
a 
building 
described 
in 
section
170(h)(4)(C)(ii) of the Internal Revenue Code of 1986,
and an appraisal with respect to the contribution, the
amendments made by subsections (a) and (b) shall
apply to returns filed after December 16, 2004.
SEC. 221. ADDITIONAL STANDARDS FOR CREDIT COUN-
SELING ORGANIZATIONS.
(a) IN GENERAL.—Section 501 (relating to exemption
from tax on corporations, certain trusts, etc.) is amended
by redesignating subsection (q) as subsection (r) and by in-
serting after subsection (p) the following new subsection:
‘‘(q) SPECIAL RULES FOR CREDIT COUNSELING ORGA-
NIZATIONS.—
‘‘(1) IN GENERAL.—An organization with respect
to which the provision of credit counseling services is
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a substantial purpose shall not be exempt from tax
under subsection (a) unless such organization is de-
scribed in paragraph (3) or (4) of subsection (c) and
such organization is organized and operated in ac-
cordance with the following requirements:
‘‘(A) The organization—
‘‘(i) provides credit counseling services
tailored to the specific needs and cir-
cumstances of consumers,
‘‘(ii) makes no loans to debtors and
does not negotiate the making of loans on
behalf of debtors, and
‘‘(iii) does not promote, or charge any
separate fee for, any service for the purpose
of improving any consumer’s credit record,
credit history, or credit rating.
‘‘(B) The organization does not refuse to
provide credit counseling services to a consumer
due to the inability of the consumer to pay, the
ineligibility of the consumer for debt manage-
ment plan enrollment, or the unwillingness of the
consumer to enroll in a debt management plan.
‘‘(C) The organization establishes and im-
plements a fee policy which—
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‘‘(i) requires that any fees charged to a
consumer for services are reasonable, and
‘‘(ii) prohibits charging any fee based
in whole or in part on a percentage of the
consumer’s debt, the consumer’s payments to
be made pursuant to a debt management
plan, or the projected or actual savings to
the consumer resulting from enrolling in a
debt management plan.
‘‘(D) At all times the organization has a
board of directors or other governing body—
‘‘(i) which is controlled by persons who
represent the broad interests of the public,
such as public officials acting in their ca-
pacities as such, persons having special
knowledge or expertise in credit or financial
education, and community leaders,
‘‘(ii) not more than 20 percent of the
voting power of which is vested in persons
who are employed by the organization or
who will benefit financially, directly or in-
directly, from the organization’s activities
(other than through the receipt of reasonable
directors’ fees or the repayment of consumer
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debt to creditors other than the credit coun-
seling organization or its affiliates), and
‘‘(iii) not more than 49 percent of the
voting power of which is vested in persons
who are employed by the organization or
who will benefit financially, directly or in-
directly, from the organization’s activities
(other than through the receipt of reasonable
directors’ fees).
‘‘(E) The organization does not own more
than 35 percent of—
‘‘(i) the total combined voting power of
a corporation which is in the business of
lending money, repairing credit, or pro-
viding debt management plan services, pay-
ment processing, or similar services,
‘‘(ii) the profits interest of a partner-
ship which is in the business of lending
money, repairing credit, or providing debt
management plan services, payment proc-
essing, or similar services, and
‘‘(iii) the beneficial interest of a trust
or estate which is in the business of lending
money, repairing credit, or providing debt
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management plan services, payment proc-
essing, or similar services.
‘‘(F) The organization receives no amount
for providing referrals to others for financial
services (including debt management services) or
credit counseling services to be provided to con-
sumers, and pays no amount to others for ob-
taining referrals of consumers.
‘‘(2) 
REQUIREMENTS
UNDER
SUBSECTION
(c)(3).—In addition to the requirements under para-
graph (1), an organization with respect to which the
provision of credit counseling services is a substantial
purpose and which is described in paragraph (3) of
subsection (c) shall not be exempt from tax under sub-
section (a) unless such organization is organized and
operated in accordance with the following require-
ments:
‘‘(A) The organization—
‘‘(i) charges no fees (other than nomi-
nal fees) for debt management plan services
or credit counseling services and waives any
fees if the consumer is unable to pay such
fees, and
‘‘(ii) does not solicit contributions from
consumers during the initial counseling
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process or while the consumer is receiving
services from the organization.
‘‘(B) The activities of the organization re-
lated to debt management plan services (in the
aggregate) do not exceed 25 percent of the total
activities of the organization activities measured
by any of the following:
‘‘(i) The time spent on activities.
‘‘(ii) The resources dedicated to activi-
ties.
‘‘(iii) The effort expended by the orga-
nization with respect to activities.
‘‘(iv) The sources of revenue of the or-
ganization.
‘‘(v) Any other measures prescribed by
the Secretary.
‘‘(3) 
REQUIREMENTS
UNDER
SUBSECTION
(c)(4).—In addition to the requirements under para-
graph (1), an organization with respect to which the
provision of credit counseling services is a substantial
purpose and which is described in paragraph (4) of
subsection (c) shall not be exempt from tax under sub-
section (a) unless such organization—
‘‘(A) is organized and operated such that it
charges no fees (other than nominal fees) for
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credit counseling services and waives any fees if
the consumer is unable to pay such fees, and
‘‘(B) notifies the Secretary, in such manner
as the Secretary may by regulations prescribe,
that it is applying for recognition as a credit
counseling organization.
‘‘(4) SECRETARIAL AUTHORITY.—The Secretary
may require any organization described in paragraph
(1) to submit such information as the Secretary re-
quires to verify that such organization meets the re-
quirements of this section.
‘‘(5) CREDIT COUNSELING SERVICES; DEBT MAN-
AGEMENT
PLAN
SERVICES.—For purposes of this
subsection—
‘‘(A) CREDIT COUNSELING SERVICES.—The
term ‘credit counseling services’ means—
‘‘(i) the providing of educational infor-
mation to the general public on budgeting,
personal finance, financial literacy, saving
and spending practices, and the sound use
of consumer credit,
‘‘(ii) the assisting of individuals and
families with financial problems by pro-
viding them with counseling, or
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‘‘(iii) a combination of the activities
described in clauses (i) and (ii).
‘‘(B) DEBT
MANAGEMENT
PLAN
SERV-
ICES.—The term ‘debt management plan serv-
ices’ means services related to the repayment,
consolidation, or restructuring of a consumer’s
debt, and includes the negotiation with creditors
of lower interest rates, the waiver or reduction of
fees, and the marketing and processing of debt
management plans.’’.
(b) DEBT MANAGEMENT PLAN SERVICES TREATED AS
AN UNRELATED BUSINESS.—Section 513 (relating to unre-
lated trade or business) is amended by adding at the end
the following:
‘‘(j) DEBT MANAGEMENT PLAN SERVICES.—The term
‘unrelated trade or business’ includes—
‘‘(1) the provision of debt management plan serv-
ices (as defined in section 501(q)(4)(B)) by an orga-
nization described in section 501(q) to the extent such
services are not substantially related to the provision
of credit counseling services (as defined in section
501(q)(4)(A)) to a consumer, and
‘‘(2) the provision of debt management plan serv-
ices (as so defined) by any organization other than an
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organization which meets the requirements of section
501(q).’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall
apply to taxable years beginning after the date of the
enactment of this Act.
(2) TRANSITION RULE FOR EXISTING ORGANIZA-
TIONS.—In the case of any organization described in
paragraph (3) or (4) section 501(c) of the Internal
Revenue Code of 1986 and with respect to which the
provision of credit counseling services is a substantial
purpose on the date of the enactment of this Act, the
amendments made by this section shall apply to tax-
able years beginning after the date which is 1 year
after the date of the enactment of this Act.
SEC. 222. EXPANSION OF THE BASE OF TAX ON PRIVATE
FOUNDATION NET INVESTMENT INCOME.
(a) GROSS INVESTMENT INCOME.—
(1) IN
GENERAL.—Paragraph (2) of section
4940(c) (relating to gross investment income) is
amended by adding at the end the following new sen-
tence: ‘‘Such term shall also include income from
sources similar to those in the preceding sentence.’’.
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(2) CONFORMING
AMENDMENT.—Subsection (e)
of section 509 (relating to gross investment income) is
amended by adding at the end the following new sen-
tence: ‘‘Such term shall also include income from
sources similar to those in the preceding sentence.’’.
(b) CAPITAL GAIN NET INCOME.—Paragraph (4) of
section 4940(c) (relating to capital gains and losses) is
amended—
(1) in subparagraph (A), by striking ‘‘used for
the production of interest, dividends, rents, and royal-
ties’’ and inserting ‘‘used for the production of gross
investment income (as defined in paragraph (2))’’,
and
(2) in subparagraph (C), by inserting ‘‘or
carrybacks’’ after ‘‘carryovers’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after the date
of the enactment of this Act.
SEC. 223. DEFINITION OF CONVENTION OR ASSOCIATION
OF CHURCHES.
Section 7701 (relating to definitions) is amended by
redesignating subsection(o) as subsection (p) and by insert-
ing after subsection (n) the following new subsection:
‘‘(o) CONVENTION OR ASSOCIATION OF CHURCHES.—
For purposes of this title, any organization which is other-
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wise a convention or association of churches shall not fail
to so qualify merely because the membership of such organi-
zation includes individuals as well as churches or because
individuals have voting rights in such organization.’’.
SEC. 224. NOTIFICATION REQUIREMENT FOR ENTITIES NOT
CURRENTLY REQUIRED TO FILE.
(a) IN GENERAL.—Section 6033 (relating to returns
by exempt organizations) is amended by redesignating sub-
section (h) as subsection (i) and by inserting after sub-
section (g) the following new subsection:
‘‘(h) ADDITIONAL NOTIFICATION REQUIREMENTS.—
Any organization the gross receipts of which in any taxable
year result in such organization being referred to in sub-
section (a)(3)(A)(ii) or (a)(3)(B)—
‘‘(1) shall furnish annually, at such time and in
such manner as the Secretary may by forms or regu-
lations prescribe, information setting forth—
‘‘(A) the legal name of the organization,
‘‘(B) any name under which such organiza-
tion operates or does business,
‘‘(C) the organization’s mailing address and
Internet web site address (if any),
‘‘(D) the organization’s taxpayer identifica-
tion number,
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‘‘(E) the name and address of a principal
officer, and
‘‘(F) evidence of the continuing basis for the
organization’s exemption from the filing require-
ments under subsection (a)(1), and
‘‘(2) upon the termination of the existence of the
organization, shall furnish notice of such termi-
nation.’’.
(b) LOSS OF EXEMPT STATUS FOR FAILURE TO FILE
RETURN OR NOTICE.—Section 6033 (relating to returns by
exempt organizations), as amended by subsection (a), is
amended by redesignating subsection (i) as subsection (j)
and by inserting after subsection (h) the following new sub-
section:
‘‘(i) LOSS OF EXEMPT STATUS FOR FAILURE TO FILE
RETURN OR NOTICE.—
‘‘(1) IN GENERAL.—If an organization described
in subsection (a)(1) or (k) fails to file an annual re-
turn or notice required under either subsection for 3
consecutive years, such organization’s status as an or-
ganization exempt from tax under section 501(a)
shall be considered revoked on and after the date set
by the Secretary for the filing of the third annual re-
turn or notice. The Secretary shall publish and main-
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tain a list of any organization the status of which is
so revoked.
‘‘(2) APPLICATION NECESSARY FOR REINSTATE-
MENT.—Any organization the tax-exempt status of
which is revoked under paragraph (1) must apply in
order to obtain reinstatement of such status regardless
of whether such organization was originally required
to make such an application.
‘‘(3) RETROACTIVE REINSTATEMENT IF REASON-
ABLE CAUSE SHOWN FOR FAILURE.—If upon applica-
tion for reinstatement of status as an organization ex-
empt from tax under section 501(a), an organization
described in paragraph (1) can show to the satisfac-
tion of the Secretary evidence of reasonable cause for
the failure described in such paragraph, the organiza-
tion’s exempt status may, in the discretion of the Sec-
retary, be reinstated effective from the date of the rev-
ocation under such paragraph.’’.
(c) NO DECLARATORY JUDGMENT RELIEF.—Section
7428(b) (relating to limitations) is amended by adding at
the end the following new paragraph:
‘‘(4) NONAPPLICATION
FOR
CERTAIN
REVOCA-
TIONS.—No action may be brought under this section
with respect to any revocation of status described in
section 6033(i)(1).’’.
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(d) NO INSPECTION REQUIREMENT.—Section 6104(b)
(relating to inspection of annual information returns), as
amended by this Act, is amended by inserting ‘‘(other than
subsection (h) thereof)’’ after ‘‘6033’’.
(e) 
NO
DISCLOSURE
REQUIREMENT.—Section
6104(d)(3) (relating to exceptions from disclosure require-
ments) is amended by redesignating subparagraph (B) as
subparagraph (C) and by inserting after subparagraph (A)
the following new subparagraph:
‘‘(B) NONDISCLOSURE
OF
ANNUAL
NO-
TICES.—Paragraph (1) shall not require the dis-
closure of any notice required under section
6033(h).’’.
(f) NO MONETARY PENALTY FOR FAILURE TO NO-
TIFY.—Section 6652(c)(1) (relating to annual returns
under section 6033 or 6012(a)(6)) is amended by adding
at the end the following new subparagraph:
‘‘(E) NO
PENALTY
FOR
CERTAIN
ANNUAL
NOTICES.—This paragraph shall not apply with
respect to any notice required under section
6033(h).’’.
(g) SECRETARIAL OUTREACH REQUIREMENTS.—
(1) NOTICE
REQUIREMENT.—The Secretary of
the Treasury shall notify in a timely manner every
organization described in section 6033(h) of the Inter-
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nal Revenue Code of 1986 (as added by this section)
of the requirement under such section 6033(h) and of
the penalty established under section 6033(i) of such
Code—
(A) by mail, in the case of any organization
the identity and address of which is included in
the list of exempt organizations maintained by
the Secretary, and
(B) by Internet or other means of outreach,
in the case of any other organization.
(2) LOSS OF STATUS PENALTY FOR FAILURE TO
FILE RETURN.—The Secretary of the Treasury shall
publicize in a timely manner in appropriate forms
and instructions and through other appropriate
means, the penalty established under section 6033(i)
of such Code for the failure to file a return under sec-
tion 6033(a)(1) of such Code.
(h) EFFECTIVE DATE.—The amendments made by this
section shall apply to notices and returns with respect to
annual periods beginning after 2005.
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SEC. 225. DISCLOSURE TO STATE OFFICIALS OF PROPOSED
ACTIONS RELATED TO EXEMPT ORGANIZA-
TIONS.
(a) IN GENERAL.—Subsection (c) of section 6104 is
amended by striking paragraph (2) and inserting the fol-
lowing new paragraphs:
‘‘(2) DISCLOSURE
OF
PROPOSED
ACTIONS
RE-
LATED TO CHARITABLE ORGANIZATIONS.—
‘‘(A) SPECIFIC NOTIFICATIONS.—In the case
of an organization to which paragraph (1) ap-
plies, the Secretary may disclose to the appro-
priate State officer—
‘‘(i) a notice of proposed refusal to rec-
ognize such organization as an organization
described in section 501(c)(3) or a notice of
proposed revocation of such organization’s
recognition as an organization exempt from
taxation,
‘‘(ii) the issuance of a letter of pro-
posed deficiency of tax imposed under sec-
tion 507 or chapter 41 or 42, and
‘‘(iii) the names, addresses, and tax-
payer identification numbers of organiza-
tions which have applied for recognition as
organizations described in section 501(c)(3).
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‘‘(B) ADDITIONAL
DISCLOSURES.—Returns
and return information of organizations with re-
spect to which information is disclosed under
subparagraph (A) may be made available for in-
spection by or disclosed to an appropriate State
officer.
‘‘(C) PROCEDURES FOR DISCLOSURE.—In-
formation may be inspected or disclosed under
subparagraph (A) or (B) only—
‘‘(i) upon written request by an appro-
priate State officer, and
‘‘(ii) for the purpose of, and only to the
extent necessary in, the administration of
State laws regulating such organizations.
Such information may only be inspected by or
disclosed to a person other than the appropriate
State officer if such person is an officer or em-
ployee of the State and is designated by the ap-
propriate State officer to receive the returns or
return information under this paragraph on be-
half of the appropriate State officer.
‘‘(D) DISCLOSURES
OTHER
THAN
BY
RE-
QUEST.—The Secretary may make available for
inspection or disclose returns and return infor-
mation of an organization to which paragraph
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(1) applies to an appropriate State officer of
any State if the Secretary determines that such
inspection or disclosure may facilitate the resolu-
tion of Federal or State issues relating to the
tax-exempt status of such organization.
‘‘(3) DISCLOSURE WITH RESPECT TO CERTAIN
OTHER EXEMPT ORGANIZATIONS.—Upon written re-
quest by an appropriate State officer, the Secretary
may make available for inspection or disclosure re-
turns and return information of an organization de-
scribed in paragraph (2), (4), (6), (7), (8), (10), or
(13) of section 501(c) for the purpose of, and to the
extent necessary in, the administration of State laws
regulating the solicitation or administration of the
charitable funds or charitable assets of such organiza-
tions. Such information may only be inspected by or
disclosed to a person other than the appropriate State
officer if such person is an officer or employee of the
State and is designated by the appropriate State offi-
cer to receive the returns or return information under
this paragraph on behalf of the appropriate State of-
ficer.
‘‘(4) USE IN CIVIL JUDICIAL AND ADMINISTRA-
TIVE
PROCEEDINGS.—Returns and return informa-
tion disclosed pursuant to this subsection may be dis-
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closed in civil administrative and civil judicial pro-
ceedings pertaining to the enforcement of State laws
regulating such organizations in a manner prescribed
by the Secretary similar to that for tax administra-
tion proceedings under section 6103(h)(4).
‘‘(5) NO DISCLOSURE IF IMPAIRMENT.—Returns
and return information shall not be disclosed under
this subsection, or in any proceeding described in
paragraph (4), to the extent that the Secretary deter-
mines that such disclosure would seriously impair
Federal tax administration.
‘‘(6) 
DEFINITIONS.—For 
purposes 
of 
this
subsection—
‘‘(A) RETURN
AND
RETURN
INFORMA-
TION.—The terms ‘return’ and ‘return informa-
tion’ have the respective meanings given to such
terms by section 6103(b).
‘‘(B) APPROPRIATE
STATE
OFFICER.—The
term ‘appropriate State officer’ means—
‘‘(i) the State attorney general,
‘‘(ii) the State tax officer,
‘‘(iii) in the case of an organization to
which paragraph (1) applies, any other
State official charged with overseeing orga-
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nizations of the type described in section
501(c)(3), and
‘‘(iv) in the case of an organization to
which paragraph (3) applies, the head of an
agency designated by the State attorney
general as having primary responsibility
for overseeing the solicitation of funds for
charitable purposes.’’.
(b) CONFORMING AMENDMENTS.—
(1) Subparagraph (A) of section 6103(p)(3) is
amended by inserting ‘‘an section 6104(c)’’ after ‘‘sec-
tion’’ in the first sentence.
(2) Paragraph (4) of section 6103(p) is
amended—
(A) in the matter preceding subparagraph
(A), by inserting ‘‘, or any appropriate State of-
ficer (as defined in section 6104(c)),’’ before ‘‘or
any other person’’,
(B) in subparagraph (F)(i), by inserting
‘‘or any appropriate State officer (as defined in
section 6104(c)),’’ before ‘‘or any other person’’,
and
(C) in the matter following subparagraph
(F), by inserting ‘‘, an appropriate State officer
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(as defined in section 6104(c)),’’ after ‘‘including
an agency’’ each place it appears.
(3) The heading for paragraph (1) of section
6104(c) is amended by inserting ‘‘FOR CHARITABLE
ORGANIZATIONS’’ after ‘‘RULE’’.
(4) Paragraph (2) of section 7213(a) is amended
by inserting ‘‘or under section 6104(c)’’ after ‘‘6103’’.
(5) Paragraph (2) of section 7213A(a) is amend-
ed by inserting ‘‘or 6104(c)’’ after ‘‘6103’’.
(6) Paragraph (2) of section 7431(a) is amended
by inserting ‘‘(including any disclosure in violation
of section 6014(c)’’ after ‘‘6103’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on the date of the enactment of this
Act but shall not apply to requests made before such date.
PART II—IMPROVED ACCOUNTABILITY OF DONOR
ADVISED FUNDS
SEC. 231. EXCISE TAX ON SPONSORING ORGANIZATIONS OF
DONOR ADVISED FUNDS FOR FAILURE TO
MEET DISTRIBUTION REQUIREMENTS.
(a) IN GENERAL.—Chapter 42 (relating to private
foundations and certain other tax-exempt organizations), as
amended by this Act, is amended by adding at the end the
following new subchapter: