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Non-Profit Filing for
Political Organizations

What is a Section 527 Organization?

A political organization established under Section 527 is a party, committee, association, fund, or other organization that is organized and operated primarily to directly or indirectly accept contributions and/or make expenditures for an exempt function. A political organization may engage in activities that are not exempt function activities, but these may not be its primary activities.

What are the filing requirements?

Section 527 political 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

Political organizations still need an employer identification number (EIN), even if it does not have employees. To get an EIN, the political organization must file Form SS-4, Application for Employer Identification Number.

What are the exemption requirements?

In order to be exempt under Section 527, a political organization must be a party, committee, association, or fund organized primarily for the purpose of directly or indirectly accepting contributions for an exempt function. The organization must be organized for the purpose of the exempt function activities. The organizations may engage in activities that are not exempt function activities, but these may not be its primary activities. In order to be exempt, a political organization needs to file a notice with the IRS that states the intention to be a tax-exempt organization.

What Counts as Taxable Income for Political Organizations?

Taxable income is calculated as an organization's gross income (excluding exempt function income) less deductions allowed by the Code that connect with gross income (excluding exempt function income), applied to the rules set forth in § 527, including a deduction of $100. The political organization's exempt function income is income that the organization puts towards the exempt function that was received as one of the following four types of income:

  • A contribution of money or other property
  • Membership dues, fees, or assessments from a member of the political organization
  • Proceeds from a political fundraising event, entertainment event, or from the sale of political campaign materials, which are not received in the ordinary course of any trade or business
  • Proceeds from conducting bingo games that are defined in § 513(f)(2)
Additionally, investment income and income from business (such as services for an unrelated organization) of a political organization does not count as exempt function income and can be taxed.

Which 990 Form Should Political Organizations File?

Political organizations can file Form 990-EZ or Form 990 long depending on their gross receipts. A political organization established under Section 527 is a party, committee, association, fund, or other organization that is organized and operated primarily to directly or indirectly accept contributions and/or make expenditures for an exempt function. A political organization may engage in activities that are not exempt function activities, but these may not be its primary activities. A political organization must provide information on the activities and policies of, and political benefit provided by, its organizational facilities that it operated during the tax year. This includes facilities operated either directly or through disregarded entities or joint ventures.

Choose Your Gross Receipt and Start Filing with ExpressTaxExempt

Conditions Forms to File Action
Gross receipts < $200,000, and Total assets < $500,000 Form 990-EZ Start Filing Now
Gross receipts ≥ $200,000, or Total assets ≥ $500,000 Form 990 Start Filing Now

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Find answers related to e-filing IRS Form 990, 990-EZ, 990-N (e-Postcard) and Extension Form 8868 with our Frequently Asked Questions.

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