Timing of Election Activity Reporting Requirements: Chart Comparing Reporting Under the IRC and FECA

527 Organizations and Campaign Activity:
Timing of Reporting Requirements under Tax
and Campaign Finance Laws
Erika Lunder and L. Paige Whitaker
Legislative Attorneys
American Law Division
Summary
One way that federal law regulates groups participating in election activities is by
requiring them to report information on such things as their contributions and
expenditures. Reporting requirements are imposed on “political organizations” by the
Internal Revenue Code (IRC) and “political committees” by the Federal Election
Campaign Act (FECA). Some of the requirements are similar; in which case, entities
are generally subject to either the ones in the IRC (and report to the Internal Revenue
Service) or those in FECA (and report to the Federal Election Commission). Included
in the entities that report to the IRS are those colloquially known as “527s” or “527
groups.” This report compares the timing of election activity reporting requirements
under the IRC and FECA, and discusses H.R. 1204, which would amend the timing of
the IRC’s reporting requirements.
Section 527 of the Internal Revenue Code (IRC) provides tax-exempt status to
“political organizations,” while the Federal Election Campaign Act (FECA) regulates
“political committees.” The definitions of the two terms are similar, but they do not¹
perfectly coincide. The term “political organization” includes entities intending to
influence federal, state, and local elections, along with the selection of non-elective
offices. The term “political committee” is narrower, covering only those entities

¹ See I.R.C. § 527(e) (defining “political organization” as “any party, committee, association,
fund, or other organization” that is “organized and operated primarily” to accept contributions
and/or make expenditures for the “influencing or attempting to influence the selection,
nomination, election, or appointment of any individual to any Federal, State, or local public
office or office in a political organization, or the election of Presidential or Vice-Presidential
electors ...”); 2 U.S.C. § 431(4)(A) (defining “political committee” as “any committee, club,
association, or other group of persons which receives contributions aggregating in excess of
$1,000 during a calendar year or which makes expenditures aggregating in excess of $1,000
during a calendar year”).

participating in federal election activities.² While political committees are a type of
political organization, not all political organizations are political committees.
In general, Section 527 political organizations are required to report tax-related
information to the Internal Revenue Service (IRS).³ Other information, such as disclosure
of contributions and expenditures, is reported to either the IRS or the Federal Election
Commission (FEC) depending on whether the political organization is also a political
committee. Those that are political committees report to the FEC; while political
organizations that are not political committees report to the IRS.
Section 527 political organizations include the entities colloquially known as “527s”
or “527 groups” that have been controversial during recent election cycles. These groups,
which benefit from Section 527 tax-exempt status, seemingly intend to influence federal
elections in ways that may place them outside the FECA definition of “political
committee.”⁴ Because these groups are not registered as political committees under
FECA, they are required to report information to the IRS, instead of the FEC.
The following chart compares the timing of election activity reporting requirements
imposed by the Internal Revenue Code and the Federal Election Campaign Act.

² For further discussion of the differences between the two terms, see CRS Report RS22895, 527
Groups and Campaign Activity: Analysis Under Campaign Finance and Tax Laws, by L. Paige
Whitaker and Erika Lunder.
³ For more information on the tax code’s provisions affecting political organizations, see
RS21716, Political Organizations Under Section 527 of the Internal Revenue Code, by Erika
Lunder.
⁴ For more information, see CRS Report RS22895, 527 Groups and Campaign Activity: Analysis
Under Campaign Finance and Tax Laws, by L. Paige Whitaker and Erika Lunder.

Table 1. Timing of Election Activity Reporting Requirements
under the IRC and FECA
Political Organizations that are notPolitical Committees under FECA
Political Committees under FECA
(includes “527s”)
Notice ofFile Form 8871 with the IRS within 24¹File Form 1 with the FEC within 10²
Formationhours of formation.days of appropriate triggering event.
I.R.C. § 527(i)2 U.S.C. § 433(a)
AnnualFile Form 990 with the IRS; the form is^thExempt from this requirement.
Informationdue on the 15 day of the fifth month³I.R.C. § 6033(g)(3)(F)
Returnafter the close of the applicable period.
I.R.C. § 6033(g)
Annual TaxFile Form 1120-POL with the IRS if the organization has more than $100 of taxable^th
Returnincome; the return is due on the 15 day of the third month after the close of the
taxable year.
I.R.C. § 6012(a)(6)
PeriodicFile Form 8872 with the IRS.⁴File Form 3 series with the FEC for
Disclosure ofOrganizations elect one of twoHouse candidate committees,
Contributionsschedules: monthly or non-monthly.Presidential candidate committees, and
and Expendituresnon-candidate committees (e.g., parties
during ElectionIf monthly: monthly reports (beginningand political action committees); but file
Years with the first month of the calendar yearwith the Secretary of the Senate for
in which a contribution is accepted or^thSenate candidate committees and non-
expenditure is made) due on the 20 daycandidate committees that
after the end of each month; except that asupport/oppose only Senate candidates.
year-end report is due on January 31 and
the reports due in November andCongressional candidate committees: 6^th
December are replaced with: a pre-filings. Quarterly reports due by the 15
general election report is due 12 days (orday after the end of each calendar
posted by registered or certified mail noquarter, except that the final report is due
later than the 15th day) before theon January 31. A pre-election report
election, covering the period ending 20covering a period ending 20 days before
days before the election, and a post-any election in which the candidate is
general election report is due 30 daysseeking election or nomination for
after the election, covering the periodelection. The report must be filed by the
ending 20 days after the election.12th day (or posted by registered or
certified mail not later than the 15th day)
If non-monthly: quarterly reportsbefore the election. A post-general
(beginning with the first quarter in whichelection report is due 30 days after the
a contribution is accepted/expenditure is^thgeneral election, and it must cover the
made) due by the 15 day after the endperiod ending 20 days after the election.
of the calendar quarter; except that the
final quarterly report is due January 31.Presidential candidate committees:
A pre-election report covering a periodThose with actual or anticipated receipts
ending 20 days before the election is dueor expenditures of over $100,000 during
12 days (or posted by registered orthe year: monthly reports due by the 20th
certified mail no later than the 15th day)day after the end of each month. In lieu
before any election with respect to whichof the reports due in November and
a contribution/expenditure is made. ADecember, a pre-general election report
post-general election report is due 30is due 12 days (or posted by registered or
days after the general election, coveringcertified mail no later than the 15th day)

Political Organizations that are notPolitical Committees under FECA
Political Committees under FECA
(includes “527s”)
the period ending 20 days after thebefore the election, covering the period
election. ending 20 days before the election; a
post-general election report is due 30
I.R.C. § 527(j)(2)days after the election, covering the
period ending 20 days after the election;
and a year end report is due on January

31.

Otherwise, the committee files four
quarterly reports, a pre-election report,
and a post-general election report.
Political committees other than
authorized candidate committees (e.g.,
PACs and parties): Committee elects
one of two schedules: monthly or non-
monthly. National committees of
political parties must file according to
the monthly schedule. Schedules for
filing are identical to those for Form

8872 filings with IRS.

2 U.S.C. § 434(a)(2),(3),(4)

PeriodicIf on a monthly schedule for electionCongressional candidate committees:
Disclosure ofyears, must continue on monthly^thQuarterly, due by the 15th day after the
Contributionsschedule with reports due by the 20 dayclose of each calendar quarter, with the
and Expendituresafter the end of each month and the finalfourth quarter due on January 31.
during Non-report due on January 31.
Election Years Presidential candidate committees:
If on a non-monthly schedule for electionchoice of monthly filings due on the 20th
years, must file 2 reports that each coverday after the close of each month or
half the year and are due on July 31 andquarterly filings due by the 15th day
January 31.after the close of each calendar quarter.
I.R.C. § 527(j)(2)Political committees other than
authorized candidate committees (e.g.,
PACs and parties):
If on a monthly schedule for election
years, must continue on monthly^th
schedule with reports due by the 20 day
after the end of each month and the final
report due on January 31.
If on a non-monthly schedule for election
years, must file 2 reports that each cover
half the year and are due on July 31 and
January 31.

2 U.S.C. § 434(a)(2),(3), (4)

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^receipts^of^les^s^th^an^{$25,000, or are}^political^com^m^ittees^of^{a s}^t^{ate or local can}^{didate or s}^t^{ate or local}
^co^m^m^{ittees o}^f^{a p}^o^{litical p}^a^r^t^y^.
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^com^m^{ittee on}^th^{e Statem}^en^{t of}^C^aⁿ^d^idacy^{; f}^o^r^c^o^m^m^ittees^s^pon^s^o^{red by}^corporation^s^{, labor}
^o^r^g^aⁿⁱ^zatioⁿ^s^o^r^tr^ad^{e asso}^ciatioⁿ^s^{, it is th}^{e co}^m^m^ittee’^s^estab^lish^m^en^t;^f^o^r^lo^cal^p^a^r^t^y^co^m^m^ittees,
^{it is m}^eetⁱⁿ^g^a^c^oⁿ^t^rⁱ^b^u^tⁱ^oⁿ^/^e^x^em^p^t^p^a^y^m^en^t/ex^p^en^d^itu^r^e^th^r^e^sh^o^l^d^;^an^d^f^o^r^o^t^h^e^r^p^o^{litical co}^m^m^ittees,
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ⁱⁿ^ex^ces^s^of^{$1,000 du}^riⁿ^g^{a cal}^en^{dar y}^ear.
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^state^o^r^lo^{cal p}^o^{litical o}^r^g^aⁿⁱ^zatioⁿ⁾^{. Ex}^cep^tioⁿ^s^ex^{ist f}^o^r^o^r^g^aⁿⁱ^zatioⁿ^s^th^{at ar}^eⁿ^o^t^r^e^q^u^ir^ed^to^f^ile
^t^h^{e F}^o^rm^{8871 (s}^{ee en}^dn^ot^{e 1) an}^{d cau}^cu^s^e^s^{or as}^s^o^ci^atⁱ^oⁿ^s^of^s^t^at^{e or l}^o^cal^of^fⁱ^ci^al^s^.
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^o^r^lo^{cal p}^o^{litical o}^r^g^aⁿⁱ^zatioⁿ^s^{. A}^d^d^itioⁿ^a^lly^{, th}^{e r}^e^q^u^ir^em^en^{t d}^o^e^{s n}^o^{t ap}^p^l^y^t^oⁱⁿ^d^e^p^eⁿ^d^en^t
^ex^pen^d^itu^res^{(i.e., ex}^pen^d^itu^res^th^{at ex}^pr^e^s^s^l^y^adv^o^{cate f}^o^{r a can}^{didate bu}^{t are m}^a^{de w}^ith^ou^{t th}^e
^can^dⁱ^d^a^t^e^’^s^c^o^o^p^er^atioⁿ⁾^{. Or}^g^aⁿⁱ^zatioⁿ^s^{, o}^t^h^e^r^th^an^p^o^{litical co}^m^m^{ittees, th}^{at m}^a^k^eⁱⁿ^d^e^p^eⁿ^d^en^t
^ex^pen^dⁱ^t^u^res^ag^g^r^eg^atⁱⁿ^g^m^o^{re t}^h^an^$250^f^o^r^a^gⁱ^v^eⁿ^el^ectⁱ^oⁿ^du^riⁿ^g^{a cal}^en^{dar y}^{ear m}^u^s^t^report^t^h^em
^to^th^e^FEC^,^u^sⁱⁿ^g^FEC^Form^{5 or a s}ⁱ^gⁿ^e^{d s}^t^atem^en^{t. T}^h^{e ex}^pen^d^itu^res^{are reported on}^{a qu}^arterly
^b^a^sis,^w^ith^sp^ecial^r^u^les^f^o^r^lar^g^er^ex^p^eⁿ^d^itu^r^e^{s. P}^o^{litical co}^m^m^{ittees r}^e^p^o^r^{t th}^{e ex}^p^eⁿ^d^itu^r^e^{s o}ⁿ^Fo^r^m
^3X^{, S}^c^h^e^du^l^e^E.
Selected Legislation in the 110^th Congress
H.R. 1204. The 527 Transparency Act of 2007 would no longer allow Section 527
political organizations to file the periodic contribution and expenditure reports with the
IRS on a non-monthly basis. Instead, all political organizations that report to the IRS
would be required to file monthly reports, in addition to pre-election, post-general
election, and year-end reports. An organization that failed to file in a timely fashion
would face a penalty equal to 30% of the expenditures and contributions that were not
adequately reported, with the organization’s managers jointly and severally liable for the
penalty. Additionally, contributions to that organization would be subject to the gift tax.
The organizations would be required to notify their contributors about the failure within
90 days of the IRS’s final determination that the failure had occurred. Finally, the bill
would require that the reports be simultaneously filed with the FEC.