Regulation of Political Organizations and the Red Herring of Tax Exempt Status

20 Pages Posted: 16 May 2013

See all articles by Roger Colinvaux

Roger Colinvaux

Catholic University of America (CUA) - Columbus School of Law

Date Written: September 1, 2006

Abstract

Congressional codification of section 527 in 1975 largely reflected the IRS’s treatment of political organizations at the time, including that contribution income was not taxable income, and did not provide a significant tax subsidy. In 2000, Congress amended section 527 to impose reporting obligations and, simultaneously, made section 527 voluntary, thus reviving pre–1975 law. The lack of a significant subsidy undermines the effectiveness of imposing burdens on section 527 organizations where there is a choice of tax treatment. The lack of a significant subsidy also raises the constitutional bar to imposing any burdens on section 527 organizations.

Keywords: political organization, 527, pac, stealth-pac

JEL Classification: H2

Suggested Citation

Colinvaux, Roger, Regulation of Political Organizations and the Red Herring of Tax Exempt Status (September 1, 2006). National Tax Journal, Vol. LIX, No. 3, 2006, Available at SSRN: https://ssrn.com/abstract=2265587

Roger Colinvaux (Contact Author)

Catholic University of America (CUA) - Columbus School of Law ( email )

3600 John McCormack Rd., NE
Washington, DC 20064
United States

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