IRS Issues Guidance
Regarding 527 Political Organization
Reporting Requirements

The Internal Revenue Service announced Thursday the issuance of a revenue ruling providing guidance concerning the new reporting and disclosure requirements for political organizations under section 527 of the Internal Revenue Code.

The revenue ruling, which provides questions and answers about the reporting and disclosure requirements, follows up on a new law passed by Congress and signed by President Clinton on July 1. The law created a new set of rules for political organizations described in section 527. Under the new law, most of these political organizations will be required to publicly disclose information about their organization, contributors, expenditures and other information.

On August 9, 2000, the IRS released a draft version of the revenue ruling and requested comments. Over 50 comments were received and considered in drafting the revenue ruling. In several instances, the IRS clarified the application of the notice and reporting requirements based upon comments received.

A majority of the comments expressed concern regarding the burden placed upon state and local political organizations that are required to file Form 8872 and also file with state election authorities. As discussed in the revenue ruling, the statute expressly provides an exception for organizations that file with the Federal Election Commission as political committees, but it does not provide a similar exception for organizations merely because they file with state election authorities. However, the IRS recognizes the potential burden imposed by the statute and is working to ease that burden. The IRS is working to provide an electronic filing system for the Form 8872.

To ease the burden on political organizations, the IRS clarified in the revenue ruling that organizations are not required to provide copies of Form 8871 and Form 8872 to persons making requests in person or in writing so long as they provide the IRS Web site address to the requester. The public can view the submitted forms at www.irs.gov.

The text of the revenue ruling follows. It will be published in the Internal Revenue Bulletin as Revenue Ruling 2000-49, I.R.B. 2000-44, dated October 30, 2000.

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