§1224. Disclosure to state officials relating to exempt organizations

Pension Protection Act of 2006

Title XII Provisions Relating to Exempt Organizations

Subtitle B Reforming Exempt Organizations

Part 1 General Reforms

(a) IN GENERAL.-Subsection (c) of section 6104 is amended by striking paragraph (2) and inserting the following new paragraphs:

"(2) DISCLOSURE OF PROPOSED ACTIONS RELATED TO CHARITABLE ORGANIZATIONS.-

"(A) SPECIFIC NOTIFICATIONS.-In the case of an organization to which paragraph (1) applies, the Secretary may disclose to the appropriate State officer-

"( i) a notice of proposed refusal to recognize such organization as an organization described in section 501(c)(3) or a notice of proposed revocation of such organization's recognition as an organization exempt from taxation,

"(ii) the issuance of a letter of proposed deficiency of tax imposed under section 507 or chapter 41 or 42, and

"(iii) the names, addresses, and taxpayer identification numbers of organizations which have applied for recognition as organizations described in section 501(c)(3).

"(B) ADDITIONAL DISCLOSURES.-Returns and return information of organizations with respect to which information is disclosed under subparagraph (A) may be made available for inspection by or disclosed to an appropriate State officer.

"(C) PROCEDURES FOR DISCLOSURE.-Information may be inspected or disclosed under subparagraph (A) or (B) only-

"( i) upon written request by an appropriate State officer, and

"(ii) for the purpose of, and only to the extent necessary in, the administration of State laws regulating such organizations.

Such information may only be inspected by or disclosed to a person other than the appropriate State officer if such person is an officer or employee of the State and is designated by the appropriate State officer to receive the returns or return information under this paragraph on behalf of the appropriate State officer.

"(D) DISCLOSURES OTHER THAN BY REQUEST.-The Secretary may make available for inspection or disclose returns and return information of an organization to which paragraph (1) applies to an appropriate State officer of any State if the Secretary determines that such returns or return information may constitute evidence of noncompliance under the laws within the jurisdiction of the appropriate State officer.

"(3) DISCLOSURE WITH RESPECT TO CERTAIN OTHER EXEMPT ORGANIZATIONS.-Upon written request by an appropriate State officer, the Secretary may make available for inspection or disclosure returns and return information of any organization described in section 501(c) (other than organizations described in paragraph (1) or (3) thereof) for the purpose of, and only to the extent necessary in, the administration of State laws regulating the solicitation or administration of the charitable funds or charitable assets of such organizations. Such information may only be inspected by or disclosed to a person other than the appropriate State officer if such person is an officer or employee of the State and is designated by the appropriate State officer to receive the returns or return information under this paragraph on behalf of the appropriate State officer.

"(4) USE IN CIVIL JUDICIAL AND ADMINISTRATIVE PROCEEDINGS.- Returns and return information disclosed pursuant to this subsection may be disclosed in civil administrative and civil judicial proceedings pertaining to the enforcement of State laws regulating such organizations in a manner prescribed by the Secretary similar to that for tax administration proceedings under section 6103(h)(4).

"(5) NO DISCLOSURE IF IMPAIRMENT.-Returns and return information shall not be disclosed under this subsection, or in any proceeding described in paragraph (4), to the extent that the Secretary determines that such disclosure would seriously impair Federal tax administration.

"(6) DEFINITIONS.- For purposes of this subsection-

"(A) RETURN AND RETURN INFORMATION.- The terms 'return' and 'return information' have the respective meanings given to such terms by section 6103(b).

"(B) APPROPRIATE STATE OFFICER.- The term 'appropriate State officer' means-

"( i) the State attorney general,

"(ii) the State tax officer,

"(iii) in the case of an organization to which paragraph (1) applies, any other State official charged with overseeing organizations of the type described in section 501(c)(3), and

"(iv) in the case of an organization to which paragraph (3) applies, the head of an agency designated by the State attorney general as having primary responsibility for overseeing the solicitation of funds for charitable purposes.".

(b) CONFORMING AMENDMENTS.-

(b)(1) Paragraph (2) of section 6103(a) is amended by inserting "or section 6104(c)" after "this section".

(b)(2) Subparagraph (A) of section 6103(p )(3) is amended by inserting "and section 6104(c)" after "section" in the first sentence.

(b)(3) Paragraph (4) of section 6103(p) is amended-

(b)(3)(A) in the matter preceding subparagraph (A), by inserting ", any appropriate State officer (as defined in section 6104(c))," before "or any other person",

(b)(3)(B) in subparagraph (F)( i), by inserting "any appropriate State officer (as defined in section 6104(c))," before "or any other person", and

(b)(3)(C) in the matter following subparagraph (F), by inserting ", an appropriate State officer (as defined in section 6104(c))," after "including an agency" each place it appears.

(b)(4) The heading for paragraph (1) of section 6104(c) is amended by inserting "FOR CHARITABLE ORGANIZATIONS" after "RULE".

(b)(5) Paragraph (2) of section 7213(a) is amended by inserting "or under section 6104(c)" after "6103".

(b)(6) Paragraph (2) of section 7213A(a) is amended by inserting "or under section 6104(c)" after "7213(a)(2)".

(b)(7) Paragraph (2) of section 7431(a) is amended by inserting "or in violation of section 6104(c)" after "6103".

(c) EFFECTIVE DATE.- The amendments made by this section shall take effect on the date of the enactment of this Act but shall not apply to requests made before such date.