U.S. Rep. Eleanor Holmes Norton (D-DC) has introduced a bill she said provides greater transparency with regard to 501(c)(4) organizations.
Norton indicated the Increased Transparency in 501(c)(4) Organizations Act of 2022 requires the Internal Revenue Service (IRS) to make publicly available the forms organizations self-declaring under Section 501(c)(4) of the Internal Revenue Code (IRC) file with the IRS.
“To be eligible for tax-exempt status under 501(c)(4), organizations, often referred to as social welfare organizations, must be devoted exclusively to charitable, educational, or recreational purposes,” Norton noted via a statement. “They can apply for 501(c)(4) status, or they can self-declare. Previously, organizations seeking to self-declare were not required to notify the IRS of their existence. In 2015, however, the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which required an organization seeking to self-declare to file a notice with the IRS, was enacted into law. The PATH Act did not, however, make the filed notices, Form 8976, subject to public disclosure.”
Per Norton, the IRS maintains Form 8976 cannot be made available under the Freedom of Information Act or other disclosure laws, creating a discrepancy between those organizations for which the IRS must make publicly available information and self-declared 501(c)(4) organizations.
“My bill would fix this discrepancy by requiring the IRS to publicly disclose any filed Form 8976 upon request, thus allowing the public to know which organizations operate under 501(c)(4), as they do with organizations that operate under 501(c)(3),” Norton concluded. “In the aftermath of the Supreme Court’s Citizens United decision, which allows unlimited expenditures in political campaigns by these social welfare organizations, greater transparency is needed.”