(a) In general Section 501(c)(4) of the Internal Revenue Code of 1986 is amended by adding at the end the following: (C) (i) Subparagraph (A) shall not apply to an entity for a taxable year if the total expenditures of such entity for the taxable year for covered political activity exceed the lesser of— (I) 10 percent of the total expenditures of such entity for the taxable year, or (II) $10,000,000. (ii) Subparagraph (A) shall not apply to an entity for a taxable year unless its governing instrument includes provisions the effects of which are to prohibit the expenditures of the entity for a covered political activity from exceeding the threshold specified in clause (i). (iii) For purposes of this subparagraph, the term covered political activity means— (I) any activity described in paragraphs (1) through (3) of section 325(c) of the Federal Election Campaign Act of 1971, and (II) any payment by the entity to any other entity described in this paragraph or to an organization described in paragraph (6) which the payor entity knows, or has reason to know, will be used directly or indirectly by the payee entity or organization for any activity referred to in subclause (I). (iv) Clause (i) shall not apply for a taxable year for which the 10 percent threshold specified in clause (i)(I) is exceeded by not more than a de minimis amount if the Secretary determines that the reason for exceeding the threshold was not willful and is due to reasonable cause. (v) The Secretary shall prescribe such regulations as may be necessary or appropriate to prevent the avoidance of clause (i), including regulations relating to a direct or indirect transfer of all or part of the assets of an entity to an entity controlled (directly or indirectly) by the same person or persons who control the transferor entity. . (b) Effective date The amendment made by subsection (a) shall apply to taxable years beginning after the date of the enactment of this Act. 4. Severability If any provision of this Act or amendment made by this Act, or the