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IRS Makes Strides in Improving Section 527 Internet Disclosure System, but Shortcomings Exist

July 2, 2003

IRS Makes Strides in Improving Section 527 Internet Disclosure System, but Shortcomings Exist


Data Now Searchable and Downloadable, But Only for Few Electronic Filings

WASHINGTON, D.C. – The government’s new Internet disclosure system of the financial activity of Section 527 groups is a vast improvement over the previous system but still has shortcomings, Public Citizen said today.

The IRS on Tuesday unveiled its new Internet disclosure system of the financial activity of Section 527 groups — political organizations that can collect unlimited soft money contributions from special interests and spend it to influence elections. The system includes a range of search features and enables users to download certain information for use in other databases.

However, only electronically filed reports are searchable or downloadable. Most 527 groups have been filing paper reports, which are made available on the site in PDF format, so much of the information on the site is not searchable by contributor name or downloadable.

“The Section 527 disclosure site is much better than it used to be,” said Frank Clemente, director of Public Citizen’s Congress Watch. “The site now includes advanced search features by contributor name and by range of contributions, and the database may be downloaded by the public into other database programs. Still, improvements could be made.”

In November 2002, Congress passed a Section 527 disclosure law, known as the Brady-Lieberman law (H.R. 5595), mandating that the IRS enhance the quality of the information filed by 527s and post this information promptly on the Internet in a searchable and downloadable fashion. The law required that the IRS meet these requirements by July 1, 2003.

The IRS has since updated its Web disclosure system for Section 527 groups. Some of the improvements in the system include:

  • Section 527 committee names can be searched with wild-card characters and even if the user knows only part of the name. Previously, the exact spelling of a complete name had to be typed into the search engine to find that group.
  • Electronically filed data can be searched by contributor name, occupation, range of contributions by dollar amount, date of contribution and a number of other specific criteria.
  • Data files can be easily downloaded and converted into other, more useful database programs, such as Excel or SPSS.
  • Section 527 groups that raise or spend $50,000 or more are required to file electronically beginning with this year’s biannual reports at the end of July, making the information available to the public sooner (presumably within 48 hours of filing).
  • Section 527s must now include the date of each contribution and the purpose of expenditure in their disclosure reports.

But problems remain with the system. The most serious: Most of the existing data, from today and dating back to when 527s first started reporting in 2000, is in PDF format (the IRS scanned in paper reports) and therefore is neither searchable nor downloadable.

“This means that the public will not be able to search the database between 2000 and the end of 2002 by contributor or other important search criteria,” said Craig Holman, legislative representative at Public Citizen’s Congress Watch. “That seriously hampers efforts to spot trends and see just what a group is doing.”

Only those reports that have been filed electronically with the IRS are searchable by contributor or are downloadable. That means that the “advanced search” engine works only for the few reports that some groups voluntarily filed in electronic format. (The IRS Web site does not warn that only electronic reports may be searched with the advanced search engine.) Similarly, only the few reports filed electronically may be downloaded. Over time this will improve because Section 527s with $50,000 or more in financial activity are required to file electronic reports in the future, beginning this month.

“Despite the drawbacks, we were pleasantly surprised by what the IRS has done,” Holman said. “Although most existing 527 data is not searchable or downloadable, the IRS has moved into the 21st century when it comes to electronic filing and disclosure of new Section 527 reports. Next, the agency should do the same for disclosure of the financial activity reports of electioneering 501(c) non-profit groups, which are likely to become the new ‘Stealth PACs’ in politics but which are not covered by the Section 527 disclosure law.”

Click here to visit the IRS’ Section 527 disclosure Web site.