Overview of 527 Organizations

Internal Revenue Service ^ | U.S. Department of Treasury

[txnativegop]

527 - POLITICAL ORGANIZATIONS

Those rules set forth in Announcement 73-84 were restated in Rev. Rul. 7421, 1974-1 C.B. 14, clarified in, Rev. Rul. 74-475, 1974-2 C.B. 22. The revenue ruling concluded, on a prospective basis, that political organizations were not exempt from federal income tax, and would be taxed on interest, dividends, and capital gains from sales of securities, less deductible expenses directly attributable to producing that income. Organizations subject to tax were required to file Form 1120.

IRC 527 provides that "political organizations" are subject to tax only to the extent provided for in that section. For all other purposes under federal law, they are treated as tax exempt organizations. IRC 527 imposes a tax on the "political organization taxable income" of political organizations - broadly speaking, income from sources other than contributions, membership dues, and fundraising events. (For most political organizations this means income from passive investments such as interest, dividends, and capital gains.) Where otherwise exempt income is not used for the political purposes that are the basis of these organizations' exemption, it is treated as "political organization taxable income" as well. IRC 527 also establishes rules for when expenditures of funds by political organizations will be included in gross income of individuals. Finally, it provides special rules for "newsletter funds" maintained by holders of and candidates for public office, and for IRC 501(c) organizations that engage in political activity.

[txnativegop]

Here is a PDF format explanation of 527 organizations

[SERKIT]

So when ABC commentators are brought in to the White House for strategery sessions to help influence the electorate, does that mean ABC should be re-categorized as a 527?

[wastedyears]

Ping the man

Let’s kick the tires and light the fires. (I’ll always love this movie)

[txnativegop]

According to what I have read, that is a distinct possibility.