DECLARATORY JUDGMENTS WITH RESPECT TO SECTION 501(e)(3) STATUS AND CLASSIFICATION.

SEC. 1306. DECLARATORY JUDGMENTS WITH RESPECT TO SECTION 501(e)(3) STATUS AND CLASSIFICATION. (a) General Rule.—Subchapter B of chapter 76 (relating to proceedings by taxpayers and third parties) is amended by it designating section 7428 as 7430, and by inserting after section 7427 the following new section: “SEC. 7428. DECLARATORY JUDGMENTS RELATING TO STATUS AND CLASSIFICATION OF ORGANIZATIONS UNDER SECTION 501(c)(3), ETC. “(a) Creation of Remedy.— In a case of actual controversy involving— “(1) a determination by the Secretary— “(A) with respect to the initial qualification or continuing qualification of an organization as an organization described in section 501(c)(3) which is exempt from tax under section 501(a) or as an organization described in section 170(c)(2), “(B) with respect to the initial classification or continuing classification of an organization as a private foundation (as defined in section 509 (a)) , or 90 STAT. 1718 “(C) with respect to the initial classification or continuing classification of an organization as a private operating foundation (as defined in section 4942(j)(3)), or “(2) a failure by the Secretary to make a determination with respect, to an issue referred to in paragraph (1), upon the filing of an appropriate pleading, the United States Tax Court, the United States Court of Claims, or the district court of the United States for the District of Columbia may make a declaration with respect to such initial qualification or continuing qualification or with respect to such initial classification or continuing classification. Any such declaration shall have the force and effect of a decision of the Tax Court or a final judgment or decree of the district court or the Court, of Claims, as the case may be., and shall be reviewable as such. “(b) Limitations.— “(1) Petitioner.— A pleading may be filed under this section only by the organization the qualification or classification of which is at issue. “(2) Exhaustion of Administrative Remedies.— A declaratory judgment or decree under this section shall not be issued in any proceeding unless the Tax Court, the Court of Claims, or the district court, of the United States for the District of Columbia determines that the organization involved has exhausted administrative remedies available to it within the Internal Revenue Service. An organization requesting the determination of an issue referred to in subsection (a)(1) shall be deemed to have exhausted its administrative remedies with respect to a failure by the Secretary to make a determination with respect, to such issue at the expiration of 270 days after the date on which the request for such determination was made if the organization has taken, in a timely manner, all reasonable steps to secure such determination. “(3) Time for bringing action.— If the Secretary sends by certified or registered mail notice of his determination with respect to an issue referred to in subsection (a)(1) to the organization referred to in paragraph (1), no proceeding may be initiated under this section by such organization unless the pleading is filed before the 91st day after the date of such mailing. “(c) Validation of Certain Contributions Made During Pendency of Proceedings.— “(1) In general.— If— “(A) the issue referred to in subsection (a)(1) involves the revocation of a determination that the organization is described in section 170(c)(2), “(B) a proceeding under this section is initiated within the time provided by subsection (b)(3), and “(C) either— “(i) a decision of the Tax Court has become final (within the meaning of section 7481), or “(ii) a judgment of the district court of the United States for the District, of Columbia has been entered, or “(iii) a judgment of the Court of Claims has been entered,”. and such decision or judgment, as the case may be, determines that the organization was not described in section 170(c)(2), 90 STAT. 1719then, notwithstanding such decision or judgment, such organization shall be treated as having been described in section 170(c)(2) for purposes of section 170 for the period beginning on the date on which the notice of the revocation was published and ending on the date on which the court first determined in such proceeding that the organization was not described in section 170(c)(2). “(2) Limitation.— Paragraph (1) shall apply only— “(A) with respect to individuals, and only to the extent that the aggregate of the contributions made by any individual to or for the use of the organization during the period specified in paragraph (1) does not exceed $1,000 (for this purpose treating a husband and wife as one contributor), and “(B) with respect to organizations described in section 170(c)(2) which are exempt from tax under section 501(a)(for this purpose excluding any such organization with respect to which there is pending a proceeding to revoke the determination under section 170(c)(2)). “(3) Exception.— This subsection shall not apply to any individual who was responsible, in whole or in part, for the activities (or failures to act) on the part of the organization which were the basis for the revocation.”. (b) Technical and Conforming Amendments.— (1) Section 7451 (relating to fee for filing petition) is amended by inserting before the period at the end thereof the following: “or under section 7428”. (2) Section 7459(c) (relating to date of decision) is amended by inserting after “under part IV of this subchapter” the following; “or under section 7428”. (3) Section 7476(c) (relating to use of Tax Court commissioners) is amended by striking out “this section” and inserting in lieu thereof “this section or section 7428”. (4) Section 7482(b)(1) (relating to venue for review of Tax Court decisions) is amended by striking out “or” at the end of subparagraph (C), by striking out the period at the end of subparagraph (D) and inserting in lieu thereof “, or”, and by inserting after subparagraph (D) the following new subparagraph: “(E) in the case of an organization seeking a declaratory decision under section 7428, the principal office or agency of the organization.”. (5) Section 7482(b)(1) is further amended by striking out “section 7476” in the last sentence and inserting in lieu thereof “section 7428, 7476”. (6) The table of sections for subchapter B of chapter 76 is amended by striking out the item relating to section 7428 and inserting in lieu thereof the following: “Sec. 7428. Declaratory judgments relating to status and classification of organizations under section 501(c)(3), etc. “Sec. 7430. Cross references.” (7) Section 1346(e) of title 28, United States Code (relating to jurisdiction of district courts with the United States as defendant), is amended by inserting “or section 7428 (in the case of the United States district court, for the District of Columbia)” immediately after “section 7426”. (8) Section 2201 of title 28, United States Code (relating to creation of declarator judgment remedy), is amended by striking out “taxes” and inserting in lieu thereof “taxes other than 90 STAT. 1720actions brought under section 7428 of the Internal Revenue Code of 1954”. (9) (A) Chapter 92 of title 28, United States Code, is amended by adding at the end thereof the following new section: “§ 1507. Jurisdiction for certain declaratory judgments “The Court of Claims shall have jurisdiction to hear any suit for and issue a declaratory judgment under section 7428 of the Internal Revenue Code of 1954.”. (B) The table of sections for such chapter is amended by adding at the end thereof the following new item: “1507. Jurisdiction for certain declaratory judgments.” (c) Effective Date.— The amendments made by tins section shall apply with respect to pleadings filed with the United States Tax Court, the district court of the United States for the District of Columbia, or the United States Court of Claims more than 6 months after the date of the enactment of this Act but only with reject to determinations (or requests for determinations) made after January 1, 1976.