Hello and thank you for your question.
Much of the information you seek is available from the IRS itself
Tax Information for Political Organizations
As I think you know, a political organization subject to 527 is a
party, committee, association, fund, or other organization (whether or
not incorporated) organized and operated primarily for the purpose of
directly or indirectly accepting contributions or making expenditures,
or both, for an exempt function. The exempt function of a political
organization is influencing or attempting to influence the selection,
nomination, election or appointment of an individual to a federal,
state, or local public office or office in a political organization.
A political organization does not need to be formally chartered or
established as a corporation, trust, or association; a separate bank
account in which political campaign funds are deposited and disbursed
only for political campaign expenses can qualify as a political
organization. Thus, an organization may maintain a separate bank
account used solely for exempt political activities and the account
itself could qualify as a Section 527 political organization.
The IRS filing rules changed in 2002, as summarized in IRS News Release 2002-123
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
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.
The initial notice:
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
There are certain exceptions, where Form 8871 is not required,
including any organization reasonably anticipating that it will always
have less than $25,000 for any taxable year.
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.
Instructions to Form 8872
Form 8872 Filing Dates
Annual Income Tax Returns:
Political organizations with taxable income after taking the $100
specific deduction must file Form 1120-POL.
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.
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
Fact Sheet 2002-13
Revenue Ruling 2003-49
The organization may also need to file with the Federal Election Commissions
Currently, the FEC only requires a 527 group to file regular
disclosure reports if it is a political party or political action
committee (PAC) that engages in either activities expressly advocating
the election or defeat of a federal candidate, or in electioneering
communications. Otherwise, it must file either with the government of
the state in which it is located or the Internal Revenue Service. Many
527s run by special interest groups raise unlimited "soft money,"
which they use for voter mobilization and certain types of issue
advocacy, but not for efforts that expressly advocate the election or
defeat of a federal candidate or amount to electioneering
Section 6113 of the Internal Revenue Code provides that certain
tax-exempt organizations that are not eligible to receive tax
deductible charitable contributions must disclose in "an express
statement (in a conspicuous and easily recognizable format)" that
contributions to the organization are not deductible for federal
income tax purposes as charitable contributions. This provision
applies to organizations that are not eligible to receive deductible
charitable contributions and are described in either section 501(c),
section 501(d), or section 527. The Service issued Notice 88-120 to
provide safe harbors for meeting the requirements of section 6113.
The law in this area is subject to change, and further revisions to
the scheme were proposed in 2004
As to whether you can do all this on your own or whether you need a
lawyer, that depends on how much time you can spend learning the
ropes, as opposed to hiring someone who is already up to speed, and at
what cost. I suggest you consider how much money you can budget for
the compliance process. Is there any chance that you can get some
free help from an already-existing 527 organization that is
sympathetic with your views? That would be an ideal solution for you.
Search terms used:
527 organization site:irs.gov
"527 organization" incorporate
Thanks again for bringing us your question -- I hope you find my
answer useful. If you require clarification of any of the above, I
would appreciate it if you would hold off on rating my answer until I
have a chance to respond.
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