Spotlight Act
Bill: S.215 | Sponsor: Sen. Tester, Jon (D-MT)
Policy area: Taxation

Summary:
Spotlight Act
This bill renders null and void final Internal Revenue Service (IRS) regulations published on May 28, 2020, relating to the reporting requirements of tax-exempt organizations.
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 (persons who contribute more than $5,000 per year to such organizations) on their information returns.
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.

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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Spotlight Act''.

SEC. 2. INCLUSION OF CONTRIBUTOR INFORMATION ON ANNUAL RETURNS OF 
              CERTAIN ORGANIZATIONS.

    (a) Repeal of Regulations.--The final regulations of the Department 
of the Treasury relating to guidance under section 6033 regarding the 
reporting requirements of exempt organizations (published at 85 Fed. 
Reg. 31959 (May 28, 2020)) shall have no force and effect.
    (b) Inclusion of Contributor Information.--
            (1) Social welfare organizations.--Section 6033(f)(1) of 
        the Internal Revenue Code of 1986 is amended by inserting 
        ``(5),'' after ``paragraphs''.
            (2) Labor organizations and business leagues.--Section 6033 
        of such Code is amended by redesignating subsection (o) as 
        subsection (p) and by inserting after subsection (n) the 
        following new subsection:
    ``(o) Additional Requirements for Organizations Described in 
Subsections (c)(5) and (c)(6) of Section 501.--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 after the date of the enactment of this Act.
    (c) Modification to Discretionary Exceptions.--Section 
6033(a)(3)(B) of the Internal Revenue Code of 1986 is amended to read 
as follows:
                    ``(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.''.
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