text: SECTION 1. MODIFICATIONS OF REPORTING REQUIREMENTS FOR CERTAIN STATE 
                AND LOCAL POLITICAL ORGANIZATIONS.
  
      (a) Notification.--Paragraph (5) of section 527(i) of the Internal 
  Revenue Code of 1986 (relating to organizations must notify Secretary 
  that they are section 527 organizations) is amended by striking ``or'' 
  at the end of subparagraph (A), by striking the period at the end of 
  subparagraph (B) and inserting ``, or'', and by adding at the end the 
  following:
                      ``(C) which is a political committee of a State or 
                  local candidate, or a local committee of a political 
                  party, as defined by State law.''.
      (b) Exemption for Certain State and Local Political Committees From 
  Reporting Requirements.--
              (1) In general.--Paragraph (5) of section 527(j) of such 
          Code (relating to required disclosures of expenditures and 
          contributions) is amended by redesignating subparagraphs (C), 
          (D), and (E) as subparagraphs (D), (E), and (F), respectively, 
          and by inserting after subparagraph (B) the following new 
          subparagraph:
                      ``(C) to any organization which is an exempt State 
                  or local political organization,''.
              (2) Exempt state or local political organization.--
          Subsection (e) of section 527 of such Code (relating to other 
          definitions) is amended by adding at the end the following new 
          paragraph:
              ``(5) Exempt state or local political organization.--
                      ``(A) In general.--The term `exempt State or local 
                  political organization' means a political 
                  organization--
                              ``(i) which does not engage in any exempt 
                          function other than to influence or to attempt 
                          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 or local 
                          requirements to submit reports containing 
                          information--
                                      ``(I) regarding individual 
                                  expenditures from and contributions to 
                                  such organization, and
                                      ``(II) regarding the person who 
                                  makes such contributions or receives 
                                  such expenditures,
                          which is substantially similar to the 
                          information 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 made public by 
                          the agency with which such reports are filed 
                          and are publicly available for inspection in a 
                          manner similar to that required by section 
                          6104(d)(1).
                      ``(B) Participation of federal candidate or office 
                  holder.--The term `exempt 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 office 
                  or an individual who holds such office--
                              ``(i) controls or materially participates 
                          in the direction of the organization, or
                              ``(ii) directs, in whole or in part, 
                          expenditures or fundraising activities of the 
                          organization.''.
      (c) Annual Return Requirements.--
              (1) Income tax returns required only where political 
          organization taxable income.--Paragraph (6) of section 6012(a) 
          of such Code (relating to general rule of persons required to 
          make returns of income) is amended by striking ``or which has 
          gross receipts of $25,000 or more for the taxable year (other 
          than an organization to which section 527 applies solely by 
          reason of subsection (f)(1) of such section)''.
              (2) Information returns.--Subsection (g) of section 6033 of 
          such Code (relating to returns required by political 
          organizations) is amended to read as follows:
      ``(g) Returns Required by Political Organizations.--
              ``(1) In general.--Every political organization (within the 
          meaning of section 527(e)(1)), and every fund treated under 
          section 527(g) as if it constituted a political organization, 
          which has gross receipts of $25,000 or more for the taxable 
          year shall file a return--
                      ``(A) containing the information required, and 
                  complying with the other requirements, under subsection 
                  (a)(1) for organizations exempt from taxation under 
                  section 501(a), and
                      ``(B) containing such other information as the 
                  Secretary deems necessary to carry out the provisions 
                  of this subsection.
              ``(2) Exceptions from filing.--
                      ``(A) Mandatory exceptions.--Paragraph (1) shall 
                  not apply to an organization--
                              ``(i) which is an exempt State or local 
                          political organization (as defined in section 
                          527(e)(5)),
                              ``(ii) which is a State or local committee 
                          of a political party, or political committee of 
                          a State or local candidate, as defined by State 
                          law,
                              ``(iii) which is a caucus or association of 
                          State or local elected officials,
                              ``(iv) which is a national association of 
                          State or local officials,
                              ``(v) which is an authorized committee (as 
                          defined in section 301(6) of the Federal 
                          Election Campaign Act of 1971) of a candidate 
                          for Federal office,
                              ``(vi) which is a national committee (as 
                          defined in section 301(14) of the Federal 
                          Election Campaign Act of 1971) of a political 
                          party, or
                              ``(vii) to which section 527 applies for 
                          the taxable year solely by reason of subsection 
                          (f)(1) of such section.
                      ``(B) Discretionary exception.--The Secretary may 
                  relieve any organization required under paragraph (1) 
                  to file an information return from filing such a return 
                  where he determines that such filing is not necessary 
                  to the efficient administration of the internal revenue 
                  laws.''.
      (d) Waiver of Penalties.--Section 527 of such Code is amended by 
  adding at the end the following:
      ``(k) 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 give notice under subsection 
          (i), or
              ``(2) penalty imposed under subsection (j) for a failure to 
          file a report,
  on a showing that such failure was due to reasonable cause and not due 
  to willful neglect.''.
      (e) Effective Date.--The amendments made by this section shall take 
  effect as if included in the amendments made by Public Law 106-230.
  
  SEC. 2. NOTIFICATION OF INTERACTION OF REPORTING REQUIREMENTS.
  
      (a) In General.--The Secretary of the Treasury, in consultation 
  with the Federal Election Commission, shall publicize information on--
              (1) the effect of the amendments made by this Act, and
              (2) the interaction of requirements to file a notification 
          or report under section 527 of the Internal Revenue Code of 
          1986 and reports under the Federal Election Campaign Act of 
          1971.
      (b) Information.--Information provided under subsection (a) shall 
  be included in any appropriate form, instruction, notice, or other 
  guidance issued to the public by the Secretary of the Treasury or the 
  Federal Election Commission regarding reporting requirements of 
  political organizations (as defined in section 527 of the Internal 
  Revenue Code of 1986) or reporting requirements under the Federal 
  Election Campaign Act of 1971.
  
  SEC. 3. TECHNICAL CORRECTIONS TO SECTION 527 ORGANIZATION DISCLOSURE 
                PROVISIONS.
  
      (a) Unsegregated Funds Not To Avoid Tax.--Paragraph (4) of section 
  527(i) of the Internal Revenue Code of 1986 (relating to failure to 
  notify) is amended by adding at the end the following new sentence: 
  ``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.''.
      (b) Procedures for Assessment and Collection of Penalty.--Paragraph 
  (1) of section 527(j) of such Code (relating to required disclosure of 
  expenditures and contributions) is amended by adding at the end the 
  following new sentence: ``For purposes of subtitle F, the penalty 
  imposed by this paragraph shall be assessed and collected in the same 
  manner as penalties imposed by section 6652(c).''.
      (c) Application of Fraud Penalty.--Section 7207 of such Code 
  (relating to fraudulent returns, statements, and other documents) is 
  amended by striking ``pursuant to subsection (b) of section 6047 or 
  pursuant to subsection (d) of section 6104'' and inserting ``pursuant 
  to section 6047(b), section 6104(d), or subsection (i) or (j) of 
  section 527''.
      (d) Duplicate Electronic and Written Filings Not Required.--
              (1) Subparagraph (A) of section 527(i)(1) of such Code is 
          amended by striking ``, electronically and in writing,''.
              (2) Subsection (i) of section 527 of such Code is amended 
          by adding at the end the following new paragraph:
              ``(7) Electronic filing.--The Secretary shall develop 
          procedures for submission in electronic form of notices 
          required to be filed under this subsection and reports required 
          to be filed under subsection (j).''.
      (e) Effective Dates.--
              (1) Subsections (a) and (b).--The amendments made by 
          subsections (a) and (b) shall apply to failures occurring on or 
          after the date of the enactment of this Act.
              (2) Subsections (c) and (d).--The amendments made by 
          subsections (c) and (d) shall take effect as if included in the 
          amendments made by Public Law 106-230.
target: Amends the Internal Revenue Code to: (1) exempt State and local candidate committees, as well as local committees of political parties, from specified notification requirements; (2) exempt certain State and local political organizations from specified reporting requirements; (3) remove language dictating that certain political organizations with gross receipts of $25,000 or more for a taxable year and specified political newsletter funds with such receipts shall file income tax returns; (4) mandate that, with certain designated exceptions, every political organization with gross receipts of $25,000 or more for a taxable year and specified political newsletter funds with such receipts file information returns with specified information including income, receipts and disbursements, as well as facts deemed necessary by the Secretary of the Treasury; (5) authorize the Secretary to waive certain related penalties; and (6) amend related penalty provisions.
feat_title: To amend section 527 of the Internal Revenue Code of 1986 to eliminate reporting and return requirements for State and local candidate committees and to avoid duplicate reporting of campaign-related information.