S. 937 — Introduced in Senate

II 113th CONGRESS 1st Session S. 937 IN THE SENATE OF THE UNITED STATES May 14, 2013 Mr. Flake (for himself, Mr. Isakson, Mr. Risch, and Mr. Cornyn) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To prohibit the Internal Revenue Service from applying disproportionate scrutiny to applicants for tax-exempt status based on ideology, and for other purposes. 1. Short title This Act may be cited as the Protect Against Ideology-Based Targeting Act. 2. Prohibition of ideology-based targeting The Internal Revenue Service is prohibited, within the exercise of its regulatory authority under the Internal Revenue Code of 1986 to review applications for exemption from taxation under section 501(a) of such Code, from developing or using any methodology that applies disproportionate scrutiny to any applicant based on the ideology expressed in the name or purpose of the organization. 3. Report to Congress (a) In general Subparagraph (A) of section 7803(d)(2) of the Internal Revenue Code of 1986 is amended— (1) by redesignating clauses (ii), (iii), and (iv) as clauses (iii), (iv), and (v), respectively, and (2) by inserting after clause (i) the following new clause: (ii) the number of complaints during the period that allege disproportionate scrutiny in the process of applying for exempt status under section 501(a) based on the ideology of the applicants; . (b) Evaluation of complaints Paragraph (2) of section 7803(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (C) In the case of a complaint or allegation described in subparagraph (A)(ii), the report shall provide an evaluation of the source and the circumstances of such complaints, including a timeline of events, identification of any Internal Revenue Service employees involved in the case, and a determination of whether such scrutiny was related to the exercise of permitted political activities (as determined under subsection (c)(3) or (h), whichever is applicable, of section 501) by an applicant or exempt organization. . (c) Conforming amendment Subparagraph (B) of section 7803(d)(2) of the Internal Revenue Code of 1986 is amended by striking Clauses (iii) and (iv) and inserting Clauses (iv) and (v). (d) Effective date The amendments made by this section shall apply to reports submitted after the date which is 6 months after the date of the enactment of this Act.