Page:United States Statutes at Large Volume 90 Part 2.djvu/254

 90 STAT. 1722 26 USC 504.

PUBLIC LAW 94-455—OCT. 4, 1976 "SEC. 504. STATUS AFTER ORGANIZATION CEASES TO QUALIFY FOR EXEMPTION UNDER SECTION 501(c)(3) BECAUSE OF SUBSTANTIAL LOBBYING. " (a) GENERAL RULE.—An organization which— " (1) was exempt (or was determined by the Secretary to be exempt) from taxation under section 501(a) by reason of being an organization described in section 501(c)(3), and " (2) is not a n organization described in section 5 0 1 (c)(3) by reason of c a r r y i n g on p r o p a g and a, or otherwise attempting, to influence legislation, shall not at any time thereafter be treated as a n organization described in section 501(c)(4). " (b) REGULATIONS To PREVENT AVOIDANCE.—The Secretary shall

26 USC 504 note.

26 USC 6033.

Ante, p. 1720. Post, f.1723.

prescribe such regulations as may be necessary or a p p r o p r i a t e to prevent the avoidance of subsection (a), including regulations relating to a direct or indirect transfer of all or part of the assets of an organization to a n organization controlled (directly or indirectly) by the same person or persons who control the transferor organization. " (c) CHURCHES, ETC.—Subsection (a) shall not apply to any organization which is a disqualified organization within the meaning of section 5 0 1 (h)(5) (relating to churches, etc.) for the taxable year immediately preceding the first taxable year for which such organization is described in paragraph (2) of subsection (a). ". (3) RULES OF INTERPRETATION.—It is the intent of Congress that enactment of this section is not to be regarded in any way as a n approval or disapproval of the decision of the Court of Appeals for the T e n t h Circuit in Christian Echoes National Ministry, Inc. versus United States, 470 F.2d 849 (1972), or of the reasoning in any of the opinions leading to that decision. (4) DISCLOSURE.—Section 6033(b) (relating to information required to be furnished annually by certain exempt organizations) is amended by striking out " and " at the end of paragraph (6), by striking out the period at the end of paragraph (7) and inserting in lieu thereof ", and", and by a d d i n g at m e end thereof the following: " (8) in the case of an organization with respect to which a n election under section 501(h) is effective for the taxable year, the following amounts for such organization for such taxable year: " (A) the lobbying expenditures (as defined in section 4911 (c)(1)), " (B) the lobbying nontaxable amount (as defined in section 4911(c)(2)), " (C) the grass roots expenditures (as defined in section 4911(c)(3)), and " (D) the grass roots nontaxable amount (as defined in section 4911(c)(4)). For purposes of paragraph (8), if section 4911(f) applies to the organization for the taxable year, such organization shall furnish the amounts with respect to the alfiliated g r o u p as well as with respect to such organization.". (b) TAXES ON EXCESS EXPENDITURES TO I N F L U E N C E LEGISLATION.—

Subtitle D (relating to miscellaneous excise taxes) is amended by inserting before chapter 42 the following new chapter:

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