Jonah Patel
Political organizations, including political parties, campaign committees for candidates for federal, state, or local office, and political action committees, are subject to tax under IRC Section 527. These organizations are required to obtain an Employer Identification Number (EIN), even if they do not have any employees. The process of obtaining an EIN involves filing Form SS-4, either online or through other methods such as mail or fax. This EIN is essential for opening bank accounts and meeting various filing requirements specific to political organizations.
Characteristics of EIN for Political Campaigns
| Characteristics | Values |
|---|---|
| Type of Organization | Political parties, campaign committees for candidates for federal, state, or local office, and political action committees |
| Tax Requirements | Subject to tax under IRC Section 527, must file Form 8872 for periods beginning on or after January 1, 2020 |
| EIN Application | Apply by completing Form SS-4 online, via fax or mail, or by calling the Business & Specialty Tax Line |
| Bank Account Requirements | Must open a bank account in the committee's name using the committee's EIN at a national bank, state bank, or other FDIC-insured institution |
| Reporting Requirements | Must electronically file periodic reports with the IRS using a username and password provided by the IRS |
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What You'll Learn
Political organisations and committees need an EIN
Political organisations and committees are subject to tax under IRC section 527 and are required to have an Employer Identification Number (EIN), even if they have no employees. This includes political parties, campaign committees for candidates for federal, state, or local office, and political action committees.
To obtain an EIN, an organisation must file Form SS-4, the Application for Employer Identification Number, either online or by calling the toll-free Business & Specialty Tax Line (800-829-4933). Alternatively, a paper Form SS-4 can be submitted via fax or mail. An organisation must also file Form 8871 within 24 hours of its creation, and it is not considered tax-exempt until it does so. An EIN is required to file Form 8871.
Many political organisations must electronically file their periodic reports. To do this, they will need the username and password issued by the IRS after the initial notice filing. If this is misplaced, TE/GE Customer Account Services can be contacted to request a replacement.
Bank accounts for political committees must be opened in the committee's name, using its EIN. This ensures that accounts are not opened using an individual's Social Security Number.
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File Form SS-4 to apply for an EIN
Political organizations, including campaign committees for candidates for federal, state, or local office, must have their own Employer Identification Number (EIN), even if they have no employees. To obtain an EIN, an organization must file Form SS-4, the Application for Employer Identification Number.
Form SS-4 can be completed online or by calling the toll-free Business & Specialty Tax Line at 800-829-4933. Alternatively, you can submit a paper Form SS-4 by fax or mail. If you choose to fax the form, ensure you send it to the appropriate fax number, which can be found on the "Where to File Your Taxes (for Form SS-4)" page. If you provide your fax number, you will receive a response within four business days. If you mail the form, the processing time is approximately four weeks.
International applicants may call 267-941-1099, which is not a toll-free number. This line is available from 6 a.m. to 11 p.m. (Eastern Time), Monday through Friday. The person making the call must be authorized to receive the EIN and answer questions concerning Form SS-4. If you wish to authorize someone else to receive the EIN and answer questions, complete the Third-Party Designee section of the form. Please note that the designee's authority ends once the EIN is assigned and released. Additionally, don't forget to sign the form for the authorization to be valid.
Keep in mind that you must also file Form 8871 within 24 hours of your organization's creation to be eligible for tax exemption. An EIN is required to file Form 8871.
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Political organisations are taxed under IRC 527
Political organisations are subject to taxation under IRC 527. This includes political parties, campaign committees for candidates for federal, state, or local office, and political action committees. These organisations are required to have their own Employer Identification Number (EIN) and to file periodic reports.
To obtain an EIN, an organisation must complete and submit Form SS-4, the Application for Employer Identification Number. This can be done online or by submitting a paper form via fax or mail. An organisation must have an EIN to file Form 8871, which must be done within 24 hours of its creation.
The Taxpayer First Act requires electronic filing by exempt organisations in tax years beginning after July 1, 2019. This includes the e-filing of Form 8872, Political Organisation Report of Contributions and Expenditures, for periods beginning on or after January 1, 2020. To file electronically, the organisation must have the username and password received from the IRS after filing Form 8871.
IRC 527 defines a "political organisation" as a party, committee, association, fund, or other organisation (whether or not incorporated) that is primarily organised and operated to directly or indirectly accept contributions or make expenditures for an exempt function. An "exempt function" refers to influencing or attempting to influence the selection, nomination, election, or appointment of any individual to federal, state, or local public office or office within a political organisation.
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Form 8871 must be filed within 24 hours of organisation's creation
Political organisations are required to file Form 8871 within 24 hours of their creation. This form is a notification to the IRS that the organisation intends to operate as a tax-exempt entity under Section 527 of the Internal Revenue Code. This section applies to political organisations that influence the selection, nomination, election, or appointment of individuals to public office at the federal, state, or local level. These include political action committees (PACs), candidate committees, and local political clubs that meet the IRS criteria.
Form 8871 must be filed electronically on the IRS website or by mailing a signed copy to the designated address. The form requires detailed information, including the organisation's formal name, mailing address, and Employer Identification Number (EIN). An organisation must have an EIN to file Form 8871. This can be obtained by completing Form SS-4, which can be done online or by calling the Business & Specialty Tax Line.
The timely filing of Form 8871 is crucial for compliance with federal regulations governing political contributions and expenditures. Failure to file this form accurately and on time can result in significant consequences, including the loss of tax-exempt status for the affected period, making the organisation's income taxable. Additionally, it may lead to penalties and damage to the organisation's reputation.
To maintain compliance, organisations may need to amend their filings to address errors or reflect changes in operations. Amendments must clearly outline any changes, such as updates to principal officers' details. Proper use of Form 8871 ensures transparency and compliance, allowing the organisation to be recognised as a tax-exempt Section 527 entity.
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Bank accounts must be opened in the committee's name using EIN
Political organizations, including campaign committees for candidates for federal, state, or local office, are subject to tax under IRC section 527. These organizations are required to have their own Employer Identification Number (EIN), even if they have no employees. An EIN is necessary for filing Form 8871, and it is also required to open a bank account.
To obtain an EIN, an organization must complete and submit Form SS-4, the Application for Employer Identification Number. This can be done online, by phone, or by submitting a paper form via fax or mail.
It is important to note that the Federal Election Commission (FEC) does not issue EINs and its staff cannot answer questions about the rules pertaining to them or other tax law requirements.
When opening a bank account for a political committee, the account must be in the committee's name and use the committee's EIN. Bank accounts should never be opened in an individual's name using their Social Security Number. The name and address of the bank must be listed on the committee's Statement of Organization (Form 1).
Additionally, a separate segregated fund (SSF) must use its own funds to pay taxes on interest income. Federal and state taxes on SSF funds are not considered administrative expenses payable by the connected organization.
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Frequently asked questions
EIN stands for Employer Identification Number, also known as a Federal Tax Identification Number.
Political parties, campaign committees for candidates for federal, state or local office, and political action committees are all political organizations that are required to have an EIN.
You can apply for an EIN by completing an online Form SS-4, Application for Employer Identification Number, or by calling the toll-free Business & Specialty Tax Line (800-829-4933). You can also submit a paper Form SS-4 via fax or mail.
You need an EIN to file certain tax forms and to open a bank account.
The FEC does not issue EINs, and the two numbers are not the same.
