CBO Says Exempt Org Reporting Bill Would Raise $16 Million

• Require each such organization to notify the Department of the Treasury of its formation and to pay a fee;

• Require the Treasury to acknowledge receipt of such notifications within 60 days; and

• Establish new monetary penalties for organizations that do not provide timely notification to the Treasury.

CBO and JCT have determined that H.R. 1295 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) and would not increase the budgets of state, local, or tribal governments.

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary effects of H.R. 1295 are shown in the following table. The effects of this legislation fall within budget function 800 (general government).

                By Fiscal Year, in Millions of Dollars

For this estimate, CBO assumes that the legislation will be enacted before the end of fiscal year 2015.

Revenues

H.R. 1295 would require each entity that forms as a 501(c)(4) organization after the bill's enactment to provide notice to the Treasury of its formation and to pay a fee. Based on information from the Internal Revenue Service (IRS) regarding the number of 501(c)(4) formed in recent years (about 3,000 per year), CBO estimates that this provision would increase revenue collections by $15 million over the 2016-2025 period. In addition, JCT estimates that the bill would increase revenues by $1 million over the 2016-2025 period from penalties imposed for violations of the provisions in H.R. 1295.

Spending Subject to Appropriation

H.R. 1295 would authorize IRS to spend amounts collected from entities applying to become 501(c)(4) organizations. CBO estimates that implementing this provision would cost $15 million over the 2016-2025 period, assuming appropriation of the necessary amounts.

PAY-AS-YOU-GO CONSIDERATIONS

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The changes in revenues that are subject to those pay-as-you-go procedures are shown in the following table.

    CBO Estimate of Pay-As-You-Go Effects for H.R. 1295, as ordered

CBO and JCT have determined that H.R. 1295 contains no intergovernmental or private-sector mandates as defined in UMRA and would not affect the budgets of state, local, or tribal governments.

ESTIMATE PREPARED BY: