Political parties; campaign committees for candidates for federal, state or local office; and political action committees are all political organizations subject to tax under IRC section 527.
Section 527 organizations are generally required to file one or more of the following:
- An initial notice
- Periodic reports on contributions and expenditures
- Annual income tax returns and
- Annual information returns
A political organization must have its own employer identification number (EIN), even if it does not have any employees. To get an EIN, an organization must file Form SS-4, Application for Employer Identification Number. For more information about obtaining an EIN (including how to apply online), see Employer ID Numbers (EIN) .
Additionally, many political organizations must electronically file their periodic reports. In order to electronically file these reports, an organization needs the username and password issued to it after filing its initial notice. If you have forgotten or misplaced this username and password, please contact EO Customer Account Services to request a replacement.
Initial Notice:
To be tax-exempt, a political organization is required to notify the IRS electronically that the organization is to be treated as a section 527 organization (see below for political organizations excepted from this filing requirement). It must also notify the IRS within 30 days of any material change, including termination, to maintain its tax-exempt status .
To notify the IRS, the organization must file Form 8871, Political Organization Notice of Section 527 Status. After electronically submitting Form 8871, the political organization must print, sign, date, and send Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status, to Internal Revenue Service, Ogden, UT 84201. Upon receipt of the Form 8453-X, the IRS will send the organization a username and password that must be used to file an amended or final Form 8871 or to electronically file Form 8872.
The following political organizations are not required to file Form 8871:
- Any organization required to report to the Federal Election Commission as a political committee,
- Committees of state or local candidates,
- State or local committees of a political party, and
- Any organization reasonably anticipating that it will always have less than $25,000 for any taxable year.
To search for and view notices filed with the IRS under section 527, see Political Organization Filing and Disclosure.
Periodic Reports:
Unless excepted, tax-exempt political organizations are required to file periodic reports with the IRS. Political organizations are excepted from filing these periodic reports if they are not required to file Form 8871 (including organizations required to report as political committees with the FEC) or are qualified state and local political organizations. All other political organizations are required to report the names and addresses (and occupation and employer if an individual) of all persons who contribute $200 or more after July 1, 2000, and of all persons receiving expenditures of $500 or more after July 1, 2000. The report is filed on Form 8872.
An organization must electronically file Form 8872 if it has, or expects to have, contributions or expenditures exceeding $50,000 for the calendar year. To file electronically, the organization must have the username and password it received from the IRS after filing its Form 8871. An organization that does not meet the above threshold may file the Form 8872 either electronically or on paper.
For further information, see the Form 8872 Instructions and the Form 8872 Filing Dates for 2004.
To search for and view reports filed with the IRS under section 527, see Political Organization Filing and Disclosure.
Annual Income Tax Returns:
Political organizations with taxable income after taking the $100 specific deduction must file Form 1120-POL. FAQs regarding the Annual Form Filing Requirements are available. For information about electronically filing Form 1120-POL, see e-file.
Annual Information Returns:
Tax-exempt political organizations with gross receipts of $25,000 or more for taxable years beginning after June 30, 2000, are required to file Form 990. Certain small political organizations may file Form 990-EZ instead. See the Form 990 Instructions for more information. Political organizations that receive contributions of $5,000 or more from any one contributor will be required to include Form 990 Schedule B with their return. For information about electronically filing Form 990, see e-file.
Qualified state and local political organizations are only required to file Form 990 if they have gross receipts of $100,000 or more for taxable years beginning after June 30, 2000.
A tax-exempt political organization is not required to file Form 990 if it is (1) not required to file Form 8871 (including an organization required to file as a political committee with the FEC) or (2) a caucus or association of state or local officials. FAQs regarding the Annual Form Filing Requirements are available.
Disclosure:
All of these notices, reports, and returns (except for Form 1120-POL) are to be made publicly available by the IRS and by the organization. Penalties are provided for failure to comply with these requirements. For more information, see our FAQs regarding the Exempt Organization Public Disclosure Requirements, the final regulations published in Internal Revenue Bulletin 1999-17, or download Disclosure Requirements. To view notices and reports filed with the IRS under section 527, see Political Organization Filing and Disclosure.
For more information about these disclosure requirements, please contact EO Customer Account Services.
More Information:
The Service provides additional information in News Release 2002-123, Fact Sheet 2002-13 and Revenue Ruling 2003-49.
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