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IRS Form 990 Filing Requirements for Political Organizations

- Updated April 21, 2023 - 10.00 AM Admin, ExpressTaxExempt

IRS recognizes the political organizations under the section 501(c)(3) as tax-exempt. This type of Organization does not pay income tax on its earnings or on the donations it receives. But the Organizations need to file the activities of the Organization with the IRS.

This article further explores the requirements for activities of the political organizations, applying for a tax-exempt status, filing requirements, and more.

1. What are political organizations?

A political organization is a party, committee, association or organization that involves itself in political activities to achieve goals that benefit the members of the organization. They also participate in election campaigns, supporting candidates and other similar activities. These organizations are tax-exempt under section 527 of the IRS.

The primary purpose of the political organizations should be an exempt function. The political organizations should be organized and operated to directly or indirectly to accept contributions or to create expenses for the tax-exempt function. The political organizations can involve in activities that are not considered exempt as far as these activities are not the organization’s primary purpose for the organization to be exempt from taxes under section 527.

2. Examples of political organizations

The political committees, parties or organizations that are listed under section 527 of the IRS included but are not limited to:

1. State candidate committees.

2. Federal candidate committees.

3. Local candidate committees.

4. Political action committees (PACs).

5. Super PACs.

6. Political parties.

These are the few types of organization which are considered as political organizations if they meet the requirements of the section 527 organizations of the IRS.

3. Unique Non-Profit activities

A political organization defined in section 527 of the IRS must be organized and operated to carry out exempt functions as its primary purpose. The exempt function of a political organization is described as influencing or trying to influence the selection, nomination, election, or the appointment of one or more individuals to a federal, local, or state office. This also includes the president or the vice-president electoral candidates. Any activities that directly or indirectly support these functions are called exempt function activities.

All political organizations are required to pay a tax on their political organization taxable income. The income of a political organization that is produced directly or indirectly through the exempt function of the organization is called the exempt function income. Any other income produced by the organization is called the political organization taxable income and this amount is subjected to a tax.

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4. 990 Filing requirements

Political organizations are required to file a Form 8871 with the IRS to be recognized as a tax-exempt section 527 political organization. An organization that is not required to file Form 8871 does not have to file the Form 990 series. The organizations that are caucus or associations of state and local officials are also not required to file Form 990.

Qualified state or local political organizations are not required to file the Form 990-series if the gross receipts of the organization are less than $100,000.

Political organizations can file Form 990-EZ or Form 990 long depending on their gross receipts. Political organizations DO NOT have to file Form 990-N.

Form 990-EZ:

Political organizations whose gross receipts are less than $200,000 and total assets less than $500,000 at the end of the taxable year are supposed to file Form 990-EZ.

Form 990:

Political organizations whose gross receipts are equal to or higher than $200,000 and total assets equal to or greater than $500,000 at the end of the taxable year are supposed to file Form 990.

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