Title: Spotlight Act
Policy area: Taxation

Summary:
Spotlight Act
This bill repeals an Internal Revenue Service (IRS) revenue procedure (Rev. Proc. 2018-38) that exempts certain tax-exempt organizations that are not 501(c)(3) organizations from the requirement to report the names and addresses of substantial contributors (persons who contribute more than $5,000 per year) on information returns that are filed with the IRS.
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 on their returns. The information must also be made available to the public.
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.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3284 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  2d Session
                                S. 3284

   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.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 26, 2018

  Mr. Tester (for himself, Mr. Wyden, Mr. Udall, Mr. Whitehouse, Mr. 
   Blumenthal, Mr. Van Hollen, Mr. Reed, Mr. Nelson, Ms. Hirono, Ms. 
Hassan, Mr. Merkley, Mr. Kaine, Mrs. McCaskill, Mr. Peters, Mr. Bennet, 
Mrs. Murray, Mr. Heinrich, Ms. Cortez Masto, Mr. Carper, Mr. Brown, Mr. 
 Durbin, Ms. Heitkamp, Mr. Casey, Mr. King, Mr. Menendez, Mr. Murphy, 
and Ms. Warren) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   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 Revenue Procedure.--Revenue Procedure 2018-38 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 (n) as 
        subsection (o) and by inserting after subsection (m) the 
        following new subsection:
    ``(n) 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 on or after December 31, 2018.
    (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.''.
    (d) Disclosure of Information.--
            (1) In general.--Section 6104(b) of the Internal Revenue 
        Code of 1986 is amended by striking ``Nothing in this 
        subsection shall authorize the Secretary to disclose the name 
        and address of any contributor to any organization'' and 
        inserting ``In the case of any organization described in 
        paragraphs (4), (5), or (6) of section 501(c) which files a 
        return under section 6033, such information shall include the 
        name and address of any contributor to such organization which 
        is required to be included on the return, but nothing in this 
        subsection shall authorize the Secretary to disclose the name 
        or address of any contributor to any other organization''.
            (2) Conforming amendment.--Section 6104(d)(3)(A) of such 
        Code is amended by striking the first sentence and inserting 
        the following: ``In the case of any organization described in 
        paragraphs (4), (5), or (6) of section 501(c) which files a 
        return under section 6033, any copies of annual returns 
        provided under paragraph (1) shall include information relating 
        to the name and address of any contributor to such 
        organization, but nothing in such paragraph shall require the 
        disclosure of the name or address of any contributor to any 
        other organization (other than a private foundation (within the 
        meaning of section 509(a)) or political organization exempt 
        from taxation under section 527).''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to returns required to be filed for taxable years 
        ending after December 31, 2017.
                                 <all>