A Bit of Honesty, regarding All the Rhubarb about the Internal Revenue Service
Let there be no doubt, we all have mixed emotions about the IRS. Most of us don’t “like” to pay taxes, but those honest adults among us will readily admit that we need someone to collect the taxes that run our government and that the government has to be funded adequately. We can disagree on how much those taxes should be, what should be taxed, and how the monies collected should be spent, but we know we have to have the agency that handles the collection.
More importantly, we sincerely want that agency, the IRS, to insure that everyone is treated fairly; that all taxes that are due are collected; and that people who don’t owe taxes are not persecuted to pay money they don’t owe. We want one standard applied to all taxpayers and to all organizations subject to regulation by the IRS.
In the interest of full disclosure, I admit that one person, for whom I feel nothing but the greatest disrespect and loathing, is an IRS agent who, in an apparent effort to look good to his superiors, persecuted a taxpayer for payment of taxes it didn’t owe, and forced the taxpayer to either enter into an expensive financial settlement with the IRS or continue to defend against a prohibitively expensive IRS challenge to its tax return. I like to hope that this scumbag is not representative of IRS personnel, that he dies a lingering and painful death and that he rots in Hell.
Negative emotions about tax collectors are nothing new. In 1792, Scottish poet Robert Burns wrote “The De’il’s Awa wi’ the Exciseman” (The Devil has Taken Away the Tax Collector). Burns knew his subject matter quite well, as he himself was an excise man, or “gauger,” being responsible, as I understand it, for insuring that taxes were paid, particularly on alcohol. Here is the text of “The De’il’s Awa wi’ the Exciseman.” Notice the first line of the second stanza, “We’ll make our malt and we’ll brew our drink,…”
The deil cam fiddlin' thro' the town,
And danc'd awa wi' th' Exciseman,
And ilka wife cries, "Auld Mahoun,
I wish you luck o' the prize, man."
Chorus-The deil's awa, the deil's awa,
The deil's awa wi' the Exciseman,
He's danc'd awa, he's danc'd awa,
He's danc'd awa wi' the Exciseman.
We'll mak our maut, and we'll brew our drink,
We'll laugh, sing, and rejoice, man,
And mony braw thanks to the meikle black deil,
That danc'd awa wi' th' Exciseman.
Chorus-The deil's awa, the deil's awa,
The deil's awa wi' the Exciseman,
He's danc'd awa, he's danc'd awa,
He's danc'd awa wi' the Exciseman.
There's threesome reels, there's foursome reels,
There's hornpipes and strathspeys, man,
But the ae best dance ere came to the land
Was-the deil's awa wi' the Exciseman.
Chorus-The deil's awa, the deil's awa,
The deil's awa wi' the Exciseman,
He's danc'd awa, he's danc'd awa,
He's danc'd awa wi' the Exciseman.
So we want the IRS to be impartial when it is collecting taxes; but there is another aspect to the operations of the IRS that we expect it to do professionally and equitably for all who are subject to its operations. And this is it: The IRS, in its regulatory capacity, determines who does NOT have to pay taxes, and with what set of circumstances they have to comply in order to be eligible for that exemption. That is where the current brouhaha comes from.
Here is a little primer on organizations recognized by the IRS. There are three important categories of organizations we need to understand.
Organizations that have been granted a tax exemption under Section 501(c)(3) of the Internal Revenue Code are public charities. Examples are universities, churches, some schools, the Red Cross, some hospitals. They are generally exempt from income taxes on their revenues because they are doing something particularly beneficial for our society.
When a person contributes to a Section 501(c)(3) organization, they are normally allowed to deduct that contribution from their taxable income. There may be limitations on how much can be deducted, but that’s basically how it works.
Public charities, that is organizations recognized by the IRS under Section 501(c)(3), MAY NOT become involved in partisan political contests, i.e., in elections. The most they can do is provide information to the public on their favorite issues and for example, publish an unbiased “report card” on how various candidates have voted or taken positions with regard to those issues.
Public charities can engage in limited lobbying related to their particular issues, but that lobbying cannot be a major part of their work. They cannot endorse any particular candidate. Donors to these organizations are, generally speaking, anonymous.
The next category of organizations is composed of groups organized under Section 501(c)(4) of the Internal Revenue Code. These are public welfare organizations. A Section 501(c)(4) organization may participate in extensive lobbying and participate in elections, but such activities must not be the primary activity of the organization, i.e., not more than 50% of their activities. The income of a Section 501(c)(4) organization is tax exempt, to them, but contributions to their organization are not tax deductible to the donor.
What the donor to a Section 501(c)(4) organization does get, though, is anonymity. Examples of Section 501(c)(4) organizations might be your local volunteer fire department, an employee organization, or a local homeowners organization. Again, and most important, the identity of donors to Section 501(c)(4) organizations do not have to be disclosed.
Some groups have a Section 501(c)(3) arm that does charitable work, and a Section 501(c)(4) arm that is more politically active. One pair of such well-known organization is The Sierra Club, which is a Section 501(c)(4) organization, and The Sierra Club Foundation, which is a Section 501(c)(3) organization that provides funding to The Sierra Club.
The third category applies to those that are specifically organized to influence elections. These are called Section 527 organizations, because that is the provision in the Internal Revenue Code where they are described. The donors to these organizations must be disclosed. Sometimes they are called political action committees or “SuperPACs.”
The distinction between a Section 501(c)(4) organization and a Section 527 organization is a very important one, particularly because of the US Supreme Court’s 2010 “Citizens United vs Federal Election Commission” (558 US 310) decision a couple of years ago, which, in a nutshell, said money spent on political campaigns was “protected speech” and couldn’t be regulated by the Federal Elections Commission.
Personally, I consider that decision to be misguided, and suspect that in future years it will be relegated to the scrap heap of history along with the “Dred Scott” decision. But for now, it is the law of the land, and the job of the IRS is to enforce the Internal Revenue Code in such a way that the free speech rights of all citizens are protected.
One of the reasons the 527 organizations have to disclose their donors is because of the public policy that people who want to influence public opinion with their speech need to stand up and be identified, so that the public can make up its own mind about how much credibility to give to statements made by persons with a vested interest in the outcome. That principle is as fundamental to our form of government as is the right to speak without government censorship.
However, what has happened in the last several years is that a number of organizations, which are tax exempt under Section 501(c)(4), have spent most or virtually all of their activities and money on influencing election results. Two major examples of such groups are Carl Rove’s “Crossroads GPS” and the Obama campaign’s “Organizing for America.” Both of those organizations spent millions of dollars in 2012, in their attempts to influence the outcome of the 2012 elections. In my view, there is room for legitimate questioning as to whether either of those is properly a Section 501(c)(4) organization, or whether instead, they should both be Section 527 organizations and be required to disclose the sources of their funding.
Since 2009, the IRS Cincinnati office had received increasing numbers of applications for exemption as Section 501(c)(4) organizations. In 2009, they received 1,751 applications, and by 2012, that number had increased to over 3,400. With a very small staff, the Cincinnati office was attempting to accurately evaluate each application, to insure that it was placed in the proper category, Section 501(c)(4) or Section 527.
The current flap about the IRS examination of groups with “tea party” or “patriot” in their names, being conducted by Representative Darrell Issa’s House Oversight Committee, has spent a lot of time and energy berating IRS employees who were only trying to differentiate between groups legitimately entitled to be a Section 501(c)(4) organization, and those which were actually organized for the purpose of influencing elections, which would more properly be under Section 527 of the Internal Revenue Code. We haven’t heard how many “liberal-leaning” groups were also asked for more information, because the people who are running the committee don’t want to hear anything that might take away from their criticism of the current administration. It is worth noting that many “tea party” individuals, at least in their visible protests, have suggested that they shouldn’t have to pay ANY taxes. With that in mind, one can understand why they would be irate that the IRS had the temerity to question whether they were eligible for a tax exemption.
It is time for someone, meaning me, to come to the defense of the IRS employees who have been working conscientiously to do their jobs. NOTHING I have seen in the media makes me think that anyone in the Cincinnati office of the IRS, which is where applications for tax exempt status are processed, was doing anything but try to be efficient in their handling of the many thousands of applications they receive. I suspect that they would be equally attentive to some “liberal” organization that was focused on influencing elections. Using the “tea party” or “patriot” words in a name as a tool to identify organizations, that possibly were not in fact public welfare groups, but were instead political action committees, makes sense to me.
It is instructive that the IRS commissioner during the time when these questioned activities took place in the Cincinnati office was a George W. Bush appointee, Douglas Shulman. When House Speaker John Boehner loudly argues that “someone should be in jail” for this situation, is he referring to the Bush appointee? Or is he referring rather to someone whom he can connect to the Obama administration, however obliquely.
Steven Miller, who was acting IRS commissioner last week, was forced to step down when the IRS inspector general’s report of the examination of “tea party” applications became public. That is an extreme injustice to him, because the complained-of activities took place under the watch of his predecessor, Douglas Shulman, and had been stopped as of May of 2012, six months before Miller became the acting IRS commissioner in November. Miller was a deputy commissioner at the time and, according to information published since then, handled the situation appropriately and internally, stopping the categorizing of the “tea party” applications, reassigning some employees and instituting different review procedures. President Obama owes Steven Miller a contrite apology for throwing him under the bus for actions where there is no evidence of wrongdoing, either by Mr. Miller or anyone else.
Kudos also to Lois Lerner, the embattled head of the IRS tax exempt organizations office, who stood up to Chairman Issa’s partisan witch-hunt, and effectively told him to piss off. It is wonderful to see someone with the integrity to stand up for herself and the professionalism of the IRS. Chairman Issa’s zeal is more a reminder of Joe McCarthy than anyone else.
One thing is clear here. The Internal Revenue Code and regulations, which runs some 80,000 pages of very fine print and thousands more pages of private letter rulings, interpretations, and other bureaucratic legalese, is far from understandable. IRS employees have the very difficult job of interpreting many inconsistent provisions in the code and IRS policy in a way that is fair for everyone. It is long past time for Congress to rewrite the Internal Revenue Code into simple language that we can all understand and that will generate sufficient revenue to pay for the programs they have approved.
Trying to shift the attention to low-level IRS employees isn’t going to divert my attention from where the real problem lies, and that is with Congressional inaction.
For your information, Sections 501(c)(3), Section 501(c)(4) and Section 527 are included below. You figure out, if you didn’t want to disclose who was funding your political action committee, which provision you would prefer to be under.
Mike Chenoweth May 23, 2013
26 USC § 501 - Exemption from tax on corporations, certain trusts, etc.
(a) Exemption from taxation
An organization described in subsection (c) or (d) orsection 401 (a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503.
(b) Tax on unrelated business income and certain other activities
An organization exempt from taxation under subsection (a) shall be subject to tax to the extent provided in parts II, III, and VI of this subchapter, but (notwithstanding parts II, III, and VI of this subchapter) shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes.
(c) List of exempt organizations
The following organizations are referred to in subsection (a):
…
(3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.
(4)
(A) Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes.
(B) Subparagraph (A) shall not apply to an entity unless no part of the net earnings of such entity inures to the benefit of any private shareholder or individual.
26 USC § 527 - Political organizations
(a) General rule
A political organization shall be subject to taxation under this subtitle only to the extent provided in this section. A political organization shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes.
(b) Tax imposed
(1) In general
A tax is hereby imposed for each taxable year on the political organization taxable income of every political organization. Such tax shall be computed by multiplying the political organization taxable income by the highest rate of tax specified in section 11 (b).
(2) Alternative tax in case of capital gains
If for any taxable year any political organization has a net capital gain, then, in lieu of the tax imposed by paragraph (1), there is hereby imposed a tax (if such a tax is less than the tax imposed by paragraph (1)) which shall consist of the sum of—
(A) a partial tax, computed as provided by paragraph (1), on the political organization taxable income determined by reducing such income by the amount of such gain, and
(B) an amount determined as provided in section 1201 (a) on such gain.
(c) Political organization taxable income defined
(1) Taxable income defined
For purposes of this section, the political organization taxable income of any organization for any taxable year is an amount equal to the excess (if any) of—
(A) the gross income for the taxable year (excluding any exempt function income), over
(B) the deductions allowed by this chapter which are directly connected with the production of the gross income (excluding exempt function income), computed with the modifications provided in paragraph (2).
(2) Modifications
For purposes of this subsection—
(A) there shall be allowed a specific deduction of $100,
(B) no net operating loss deduction shall be allowed under section 172, and
(C) no deduction shall be allowed under part VIII of subchapter B (relating to special deductions for corporations).
(3) Exempt function income
For purposes of this subsection, the term “exempt function income” means any amount received as—
(A) a contribution of money or other property,
(B) membership dues, a membership fee or assessment from a member of the political organization,
(C) proceeds from a political fundraising or entertainment event, or proceeds from the sale of political campaign materials, which are not received in the ordinary course of any trade or business, or
(D) proceeds from the conducting of any bingo game (as defined in section 513 (f)(2)),
to the extent such amount is segregated for use only for the exempt function of the political organization.
(d) Certain uses not treated as income to candidate
For purposes of this title, if any political organization—
(1) contributes any amount to or for the use of any political organization which is treated as exempt from tax under subsection (a) of this section,
(2) contributes any amount to or for the use of any organization described in paragraph (1) or (2) of section 509 (a) which is exempt from tax under section 501 (a), or
(3) deposits any amount in the general fund of the Treasury or in the general fund of any State or local government,
such amount shall be treated as an amount not diverted for the personal use of the candidate or any other person. No deduction shall be allowed under this title for the contribution or deposit of any amount described in the preceding sentence.
(e) Other definitions
For purposes of this section—
(1) Political organization
The term “political organization” means a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.
(2) Exempt function
The term “exempt function” means the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local public office or office in a political organization, or the election of Presidential or Vice-Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. Such term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under section 162 (a).
(3) Contributions
The term “contributions” has the meaning given to such term by section 271 (b)(2).
(4) Expenditures
The term “expenditures” has the meaning given to such term by section 271 (b)(3).
(5) Qualified State or local political organization
(A) In general
The term “qualified State or local political organization” means a political organization—
(i) all the exempt functions of which are solely for the purposes of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any State or local public office or office in a State or local political organization,
(ii) which is subject to State law that requires the organization to report (and it so reports)—
(I) information regarding each separate expenditure from and contribution 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
(I) made public by the agency with which such reports are filed, and
(II) made publicly available for inspection by the organization in the manner described in section 6104 (d).
(B) Certain State law differences 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 following:
(i) The minimum amount of any expenditure or contribution required to be reported 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 organization.
(II) The occupation of any person who makes contributions to the organization.
(III) The employer of any person who receives expenditures from the organization.
(IV) The occupation of any person who receives expenditures from the organization.
(V) The purpose of any expenditure of the organization.
(VI) The date any contribution was made to the organization.
(VII) The date of any expenditure of the organization.
(C) De minimis errors
An organization shall not fail to be treated as a qualified State or local political organization solely because such organization makes de minimis errors in complying with the State reporting requirements and the public inspection requirements described in subparagraph (A) as long as the organization corrects such errors within a reasonable period after the organization becomes aware of such errors.
(D) Participation of Federal candidate or office holder
The term “qualified State or local political organization” shall not include any organization otherwise described in subparagraph (A) if a candidate for nomination or election to Federal elective 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 organization (unless the Secretary determines that such solicitations resulted in de minimis contributions and were made without the prior knowledge and consent, whether explicit or implicit, of the organization or its officers, directors, agents, or employees), or
(iii) directs, in whole or in part, disbursements by the organization.
(f) Exempt organization, which is not political organization, must include certain amounts in gross income
(1) In general
If an organization described in section 501 (c) which is exempt from tax under section 501 (a) expends any amount during the taxable year directly (or through another organization) for an exempt function (within the meaning of subsection (e)(2)), then, notwithstanding any other provision of law, there shall be included in the gross income of such organization for the taxable year, and shall be subject to tax under subsection (b) as if it constituted political organization taxable income, an amount equal to the lesser of—
(A) the net investment income of such organization for the taxable year, or
(B) the aggregate amount so expended during the taxable year for such an exempt function.
(2) Net investment income
For purposes of this subsection, the term “net investment income” means the excess of—
(A) the gross amount of income from interest, dividends, rents, and royalties, plus the excess (if any) of gains from the sale or exchange of assets over the losses from the sale or exchange of assets, over
(B) the deductions allowed by this chapter which are directly connected with the production of the income referred to in subparagraph (A).
For purposes of the preceding sentence, there shall not be taken into account items taken into account for purposes of the tax imposed by section 511 (relating to tax on unrelated business income).
(3) Certain separate segregated funds
For purposes of this subsection and subsection (e)(1), a separate segregated fund (within the meaning of section 610 of title 18) or of any similar State statute, or within the meaning of any State statute which permits the segregation of dues moneys for exempt functions (within the meaning of subsection (e)(2)) which is maintained by an organization described in section 501 (c) which is exempt from tax under section 501 (a) shall be treated as a separate organization.
(g) Treatment of newsletter funds
(1) In general
For purposes of this section, a fund established and maintained by an individual who holds, has been elected to, or is a candidate (within the meaning of paragraph (3)) for nomination or election to, any Federal, State, or local elective public office, for use by such individual exclusively for the preparation and circulation of such individual’s newsletter shall, except as provided in paragraph (2), be treated as if such fund constituted a political organization.
(2) Additional modifications
In the case of any fund described in paragraph (1)—
(A) the exempt function shall be only the preparation and circulation of the newsletter, and
(B) the specific deduction provided by subsection (c)(2)(A) shall not be allowed.
(3) Candidate
For purposes of paragraph (1), the term “candidate” means, with respect to any Federal, State, or local elective public office, an individual who—
(A) publicly announces that he is a candidate for nomination or election to such office, and
(B) meets the qualifications prescribed by law to hold such office.
(h) Special rule for principal campaign committees
(1) In general
In the case of a political organization, which is a principal campaign committee, paragraph (1) of subsection (b) shall be applied by substituting “the appropriate rates” for “the highest rate”.
(2) Principal campaign committee defined
(A) In general
For purposes of this subsection, the term “principal campaign committee” means the political committee designated by a candidate for Congress as his principal campaign committee for purposes of—
(i) section 302(e) of the Federal Election Campaign Act of 1971 (2 U.S.C. 432 (e)), and
(ii) this subsection.
(B) Designation
A candidate may have only 1 designation in effect under subparagraph (A)(ii) at any time and such designation—
(i) shall be made at such time and in such manner as the Secretary may prescribed by regulations, and
(ii) once made, may be revoked only with the consent of the Secretary.
Nothing in this subsection shall be construed to require any designation where there is only one political committee with respect to a candidate.
(i) Organizations must notify Secretary that they are section 527 organizations
(1) In general
Except as provided in paragraph (5), an organization shall not be treated as an organization described in this section—
(A) unless it has given notice to the Secretary electronically 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 or, in the case of any material change in the information required under paragraph (3), for the period beginning on the date on which the material change occurs and ending on the date on which such notice is given.
(2) Time to give notice
The notice required under paragraph (1) shall be transmitted not later than 24 hours after the date on which the organization is established or, in the case of any material change in the information required under paragraph (3), not later than 30 days after such material change.
(3) Contents of notice
The notice required under paragraph (1) shall include information regarding—
(A) the name and address of the organization (including any business address, if different) and its electronic mailing address,
(B) the purpose of the organization,
(C) the names and addresses of its officers, highly compensated employees, contact person, custodian of records, and members of its Board of Directors,
(D) the name and address of, and relationship to, any related entities (within the meaning of section 168 (h)(4)),
(E) whether the organization intends to claim an exemption from the requirements of subsection (j) orsection 6033, and
(F) such other information as the Secretary 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 deductions directly connected with the production of such income) or, in the case of a failure relating to a material change, by taking into account such income and deductions only during the period beginning on the date on which the material change occurs and ending on the date on which notice is given under this subsection. For purposes of the preceding sentence, the term “exempt function income” means any amount described in a subparagraph of subsection (c)(3), whether or not segregated for use for an exempt function.
(5) Exceptions
This subsection shall not apply to any organization—
(A) to which this section applies solely by reason of subsection (f)(1),
(B) which reasonably anticipates that it will not have gross receipts of $25,000 or more for any taxable year, or
(C) which is a political committee of a State or local candidate or which is a State or local committee of a political party.
(6) Coordination with other requirements
This subsection shall not apply to any person 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 committee.
(j) Required disclosure of expenditures and contributions
(1) Penalty for failure
In the case of—
(A) a failure to make the required disclosures under paragraph (2) at the time and in the manner prescribed therefor, or
(B) a failure to include any of the information required to be shown by such disclosures 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 relates. For purposes of subtitle F, the amount imposed by this paragraph shall be assessed and collected in the same manner as penalties imposed by section 6652 (c).
(2) Required disclosure
A political organization which accepts a contribution, or makes an expenditure, for an exempt function during any calendar 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 expenditure is made, which shall be filed not later than the fifteenth day after the last day of each calendar quarter, except that the report for the quarter ending on December 31 of such calendar year shall be filed not later than January 31 of the following calendar year,
(II) a pre-election report, which shall be filed not later than the twelfth day before (or posted by registered or certified mail not later than the fifteenth day before) any election with respect to which the organization makes a contribution or expenditure, 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 thirtieth 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 covering 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 calendar 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 last day of the month, except that, in lieu of filing the reports otherwise due in November and December of any year in which a regularly scheduled general election is held, a pre-general election report shall be filed in accordance with subparagraph (A)(i)(II), a post-general election report shall be filed in accordance with subparagraph (A)(i)(III), and a year end report shall be filed not later than January 31 of the following calendar year.
(3) Contents of report
A report required under paragraph (2) shall contain the following information:
(A) The amount, date, and purpose of each expenditure made to a person if the aggregate amount of expenditures to such person during the calendar year equals or exceeds $500 and the name and address of the person (in the case of an individual, including the occupation and name of employer of such individual).
(B) The name and address (in the case of an individual, including the occupation and name of employer of such individual) of all contributors which contributed an aggregate amount of $200 or more to the organization during the calendar year and the amount and date of the contribution.
Any expenditure or contribution disclosed in a previous 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 contribution if the person has contracted or is otherwise obligated to make the expenditure or contribution.
(5) Coordination with other requirements
This subsection shall not apply—
(A) to any person 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 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 is a qualified State or local political organization,
(D) to any organization which reasonably anticipates that it will not have gross receipts of $25,000 or more for any taxable year,
(E) to any organization to which this section applies solely by reason of subsection (f)(1), or
(F) with respect to any expenditure which is an independent expenditure (as defined in section 301 of such Act).
(6) Election
For purposes of this subsection, 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 candidate for Federal office,
(C) a primary election held for the selection of delegates to a national nominating convention of a political party, or
(D) a primary election held for the expression of a preference for the nomination of individuals for election to the office of President.
(7) Electronic filing
Any report required under paragraph (2) with respect to any calendar year shall be filed in electronic form if the organization has, or has reason to expect to have, contributions exceeding $50,000 or expenditures exceeding $50,000 in such calendar year.
(k) Public availability of notices and reports
(1) In general
The Secretary shall make any notice described in subsection (i)(1) or report described in subsection (j)(7) available for public inspection on the Internet not later than 48 hours after such notice or report has been filed (in addition to such public availability as may be made under section 6104 (d)(7)).
(2) Access
The Secretary shall make the entire database of notices and reports which are made available to the public under paragraph (1) searchable by the following items (to the extent the items are required to be included in the notices and reports):
(A) Names, States, zip codes, custodians of records, directors, and general purposes of the organizations.
(B) Entities related to the organizations.
(C) Contributors to the organizations.
(D) Employers of such contributors.
(E) Recipients of expenditures by the organizations.
(F) Ranges of contributions and expenditures.
(G) Time periods of the notices and reports.
Such database shall be downloadable.
(l) 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 comply with the requirements of subsection (i), or
(2) amount imposed under subsection (j) for a failure to comply with the requirements thereof,
on a showing that such failure was due to reasonable cause and not due to willful neglect.
|