Page:United States Statutes at Large Volume 100 Part 3.djvu/958

 100 STAT. 2766

PUBLIC LAW 99-514—OCT. 22, 1986

certificates under section 3402 of the Internal Revenue Code of 1954 to better approximate actual tax liability under the amendments made by this Act. (b) CERTAIN DECREASES IN WITHHOLDING NOT PERMITTED.—Subsec-

tion (i) of section 3402 is amended by striking out "or decreases". (c) EMPLOYER'S RESPONSIBILITY.—If an employee has not filed a revised withholding allowance certificate before October 1, 1987, the employer shall withhold income taxes from the employee's wages— (1) as if the employee claimed 1 withholding allowance, if the employee checked the "single" box on the employee's previous withholding allowance certificate, or (2) as if the employee claimed 2 withholding allowances, if the employee checked the "married" box on the employee's previous withholding allowance certificate. SEC. 1582. REPORT ON RETURN-FREE SYSTEM.

(a) REPORT.—The Secretary of the Treasury or his delegate shall prepare a report on a return-free system for the Federal income tax of individuals. Such report shall include— (1) the identification of classes of individuals who would be permitted to use a return-free system, (2) how such a system would be phased in, (3) what additional resources the Internal Revenue Service ~) would need to carry out such a system, and (4) the types of changes to the Internal Revenue Code of 1954 which would inhibit or enhance the use of such a system. (b) DUE DATE.—The report under subsection (a) shall be submitted, not later than 6 months after the date of the enactment of this Act, to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate.

TITLE XVI—EXEMPT AND NONPROFIT ORGANIZATIONS SEC. 1601. CERTAIN DISTRIBUTIONS OF LOW COST ARTICLES AND EXCHANGES AND RENTALS OF MEMBER LISTS BY CERTAIN ORGANIZATIONS NOT TO BE TREATED AS UNRELATED TRADE OR BUSINESS.

(a) IN GENERAL.—Section 513 (defining unrelated trade or business) is amended by adding at the end thereof the following new subsection: "(h) CERTAIN DISTRIBUTIONS OF LOW COST ARTICLES WITHOUT OBLIGATION TO PURCHASE AND EXCHANGES AND RENTALS OF MEMBER LISTS.—

"(1) IN GENERAL.—In the case of an organization which is described in section 501 and contributions to which are deductible under paragraph (2) or (3) of section 170(c), the term 'unrelated trade or business' does not include— "(A) activities relating to the distribution of low cost articles if the distribution of such articles is incidental to the solicitation of charitable contributions, or af^AII "(B) g^jjy trade or business which consists of— "(i) exchanging with another such organization names and addresses of donors to (or members of) such organization, or

�