Small Business Job Protection Act of 1996 and Taxpayers Bill of Rights 2: Exempt Organization Provision

President Clinton recently signed into law two legislative bills that will have a significant impact on tax-exempt organizations. This paper presents the highlights of the Small Business Job Protection Act (the Small Business Act) and the Taxpayer Bill of Rights 2 (TBR2). TBR2 contains the long-expected provisions imposing "intermediate sanctions" on persons who engage in "excess benefit transactions" with Section 501(c)(3) and (4) organizations (other than private foundations), and on organization managers who knowingly approve such transactions. TBR2 also requires exempt organizations (other than private foundations) to provide, upon request, copies of their applications for tax exemption and their most recent form 990s.

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