July 02, 2000
IRS Releases New Form for Section 527
Political Groups, Outlines Plans for New Law
WASHINGTON -The Internal Revenue
Service on Wednesday announced the release of the new form that section
527 political organizations must file and detailed plans for implementing
other aspects of the new law governing these groups.
Starting immediately, Section 527 political organizations must
file Form 8871 with the IRS. This notice of organization must be filed
by July 31. The IRS action follows a new law approved last month by
Congress and signed July 1 by President Clinton. The legislation creates
a new set of rules for political organizations established under
section 527 of the Internal Revenue Code. Under the new law, these
527 groups will be required to publicly disclose details about their
organization, contributors, expenditures, annual returns and other
information. "The IRS is moving quickly to put these new rules in place.
We want to make information from these organizations available to the
public as soon as possible," IRS Commissioner Charles O. Rossotti said.
The IRS will soon release new forms and other details involving
reporting and disclosure requirements for 527 organizations. The first
step is the release of Form 8871, "Political Organization Notice of
Section 527 Status." The form is now available at the IRS web site,
www.irs.gov, in the "Forms and Pubs" section.
Organizations must file Form 8871 both electronically and in
writing. The form can be filed electronically at
www.irs.gov/bus_info/eo/pol-file.html. Every political organization
under section 527 must file Form 8871 unless it reasonably expects
annual gross receipts to always be less than $25,000 in each taxable
year. Political committees also do not have to submit this form if they
are required to file reports with the Federal Election Commission. Section
501(c) organizations such as social welfare groups, labor unions and
trade associations that file Form 1120-POL and pay taxes under section
527(f) also will not have to submit Form 8871.
The law requires newly established organizations to file Form 8871
within 24 hours of their creation. However, the IRS realizes some of these
section 527 organizations may not yet be aware of this requirement.
Consequently, the IRS has extended the due date for filing Form 8871
until July 31, 2000, for any organizations established after June 30,
2000. Organizations already in existence on June 30, 2000, already have
until July 31, 2000, to file Form 8871.
Form 8871 contains a variety of information about 527 organizations,
including the organization's purpose, a list of related entities, contact
persons, record custodians, e-mail addresses and lists of officers,
directors and highly compensated employees. By August 15, the IRS will
make available on its Internet site a list of organizations filing Form
8871. Copies of the Form 8871 will be available through the 527
organizations. The IRS is working on procedures to make copies of the
forms available for public inspection as soon as possible.
The IRS will soon release another form that 527 organizations will
use to periodically disclose contributions and expenditures made after July
1, 2000. Form 8872, Political Organization Report of Contributions and
Expenditures, will include names, addresses, employers and occupations
for contributors of $200 or more annually. Organizations or individuals
receiving $500 or more annually from 527 organizations also will be listed
on these forms. The IRS will have additional guidance on Form 8872 very
soon. Information from filed Forms 8872 will be available for public
The IRS also is in the process of determining which forms will be
used as annual returns by 527 organizations with gross receipts of $25,000
or more. These returns also will be available for public review. "Putting
these new rules in place poses a major challenge for the IRS given the
short time frame available," Rossotti said. "However, we are committed
to serving taxpayers by implementing this important new law in a timely
and convenient manner."
If 527 organizations have questions or need help, they can contact
1-877-829-5500. Media inquiries should be directed to the IRS Media
Relations office at (202)622-4000.
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