Certain political organizations are required to notify the IRS that the organization is to be treated as a section 527 political organization. The organization is also required to periodically report certain contributions received and expenditures made by the organization. To notify the IRS of section 527 treatment, an organization must file Form 8871. To report contributions and expenditures, certain tax-exempt political organizations must file Form 8872.taxmap/pubs/p557-009.htm#en_us_publink1000199931
A political organization must electronically file Form 8871 to notify the IRS that it is to be treated as a section 527 organization. However, an organization is not required to file Form 8871 if:
- It reasonably expects its annual gross receipts to always be less than $25,000.
- It is a political committee required to report under the Federal Election Campaign Act of 1971 (FECA) (2 U.S.C. 431(4)).
- It is a state or local candidate committee.
- It is a state or local committee of a political party.
- It is a section 501(c) organization that has made an "exempt function expenditure."
All other political organizations are required to file Form 8871.
An organization must provide on Form 8871:
- Its name and address (including any business address, if different) and its electronic mailing address;
- Its purpose;
- The names and addresses of its officers, highly compensated employees, contact person, custodian of records, and members of its Board of Directors;
- The name and address of, and relationship to, any related entities (within the meaning of section 168(h)(4)); and
- Whether it intends to claim an exemption from filing Form 8872, Form 990, or Form 990-EZ.
Before filing Form 8871, the political organization must have its own EIN even if it has no employees. If your organization needs an EIN, you can apply for one:
- Online—Click on the Employer ID Numbers (EINs) link at www.IRS.gov/businesses/small.
- By telephone at 1-800-829-4933 from 7:00 am to 10:00 pm in the organization's local time zone.
- By mailing or faxing Form SS-4.
If you previously applied for an EIN and have not yet received it, or you are unsure whether you have an EIN, please call our toll-free customer account services number, 1-877-829-5500, for assistance. taxmap/pubs/p557-009.htm#en_us_publink1000199933
The initial Form 8871 must be filed within 24 hours of the date on which the organization was established. If there is a material change an amended Form 8871 must be filed within 30 days of the material change. When the organization terminates its existence, it must file a final Form 8871 within 30 days of termination.
If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. taxmap/pubs/p557-009.htm#en_us_publink1000199934
An organization must file Form 8871 electronically via the IRS Internet website at www.IRS.gov/polorgs
(Keyword: political orgs).
After electronically submitting Form 8871, the political organization must print, sign, and mail Form 8453-X to the IRS. 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.taxmap/pubs/p557-009.htm#en_us_publink1000199936taxmap/pubs/p557-009.htm#en_us_publink1000199937
An organization that is required to file Form 8871, but fails to do so on a timely basis, will not be treated as a tax-exempt section 527 organization for any period before the date Form 8871 is filed. Also, the taxable income of the organization for that period will include its exempt function income (including contributions received, membership dues, and political fundraising receipts) minus any deductions directly connected with the production of that income.
Failure to file an amended Form 8871 will cause the organization not to be treated as a tax-exempt section 527 organization. If an organization is treated as not being a tax-exempt section 527 organization, the taxable income of the organization will be determined by considering any exempt function income and deductions during the period beginning on the date of the material change and ending on the date that the amended Form 8871 is filed.
The tax is computed by multiplying the organization's taxable income by the highest corporate tax rate. taxmap/pubs/p557-009.htm#en_us_publink1000199938
Any individual or corporation that willfully delivers or discloses to the IRS any list, return, account, statement or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation) or imprisoned for not more than 1 year or both.taxmap/pubs/p557-009.htm#en_us_publink1000199939
The IRS may waive any additional tax assessed on an organization for failure to file Form 8871 if the failure was due to reasonable cause and not willful neglect.taxmap/pubs/p557-009.htm#en_us_publink1000199940taxmap/pubs/p557-009.htm#en_us_publink1000199941
Every tax-exempt section 527 political organization that accepts a contribution or makes an expenditure, for an exempt function during the calendar year, must file Form 8872 except:
- A political organization that is not required to file Form 8871 (discussed earlier).
- A political organization that is subject to tax on its income because it did not file or amend Form 8871.
- A qualified state or local political organization (QSLPO), discussed below.
All other tax-exempt section 527 organizations that accept contributions or make expenditures for an exempt function are required to file Form 8872.
A state or local political organization may be a QSLPO if:
- All of its political activities relate solely to state or local public office (or office in a state or local political organization).
- It is subject to a state law that requires it to report (and it does report) to a state agency information about contributions and expenditures that is similar to the information that the organization would otherwise be required to report to the IRS.
- The state agency and the organization make the reports publicly available.
- No federal candidate or office holder:
- Controls or materially participates in the direction of the organization,
- Solicits contributions for the organization, or
- Directs the disbursements of the organization.
If an organization pays an individual $500 or more for the calendar year, the organization is required to disclose the individual's name, address, occupation, employer, amount of the expense, the date the expense was paid, and the purpose of the expense on Form 8872.
If an organization receives contributions of $200 or more from one contributor for the calendar year, the organization must disclose the donor's name, address, occupation, employer, and the date the contributions were made.
For additional information that is required, see Form 8872.taxmap/pubs/p557-009.htm#en_us_publink1000199944
The due dates for filing Form 8872 vary depending on whether the form is due for a reporting period that occurs during a calendar year in which a regularly scheduled election is held, or any other calendar year (a nonelection year).
If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day.taxmap/pubs/p557-009.htm#en_us_publink1000199945
In election years, Form 8872 must be filed on either a quarterly or a monthly basis. Both a pre-election report and a post-election report are also required to be filed in an election year. An election year is any year in which a regularly scheduled general election for federal office is held (an even-numbered year). taxmap/pubs/p557-009.htm#en_us_publink1000199946
In nonelection years, the form must be filed on a semiannual or monthly basis. A complete listing of these filing periods are in the Form 8872 Instructions. A nonelection year is any odd-numbered year. taxmap/pubs/p557-009.htm#en_us_publink1000199947
Form 8872 can be filed either electronically or by mail; however, organizations that have, or expect to have, contributions or expenditures of $50,000 or more for the year must file electronically.
To file by mail, send Form 8872 to the:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0027
File electronically via the IRS internet website at www.IRS.gov/polorgs
. You will need a user ID and password to electronically file Form 8872. Organizations that have completed the electronic filing of Form 8871 and submitted a completed and signed Form 8453-X will receive a username and password in the mail.
Organizations that have completed the electronic filing of Form 8871, but have not received their user ID and password can request one by writing to the following address: taxmap/pubs/p557-009.htm#en_us_publink1000199950
Internal Revenue Service
Attn: Request for 8872 Password
Mail Stop 6273
Ogden, UT 84201
If you have forgotten or misplaced the username and password issued to your organization after you filed your initial Form 8871, send a letter requesting a new username and password to the address under Electronic filing. You can also fax your request to (801) 620-3249. It may take 3-6 weeks for your new username and password to arrive, as they will be mailed to the organization. taxmap/pubs/p557-009.htm#en_us_publink1000199951
A penalty will be imposed if the organization is required to file Form 8872 and it:
- Fails to file the form by the due date, or
- Files the form but fails to report all of the information required or reports incorrect information.
The penalty is 35% of the total amount of contributions and expenditures to which a failure relates. taxmap/pubs/p557-009.htm#en_us_publink1000199952
Any individual or corporation that willfully delivers or discloses any list, return, account, statement, or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation), or imprisoned for not more than 1 year, or both.taxmap/pubs/p557-009.htm#en_us_publink1000199953
The IRS may waive any additional tax assessed on an organization for failure to file Form 8872 if the failure was due to reasonable cause and not willful neglect.