527

527 organizations are named after Section 527 of the Internal Revenue Code. Section 527 exempts political committees from tax, except on investments. Candidate committees and political action committees are organized under Section 527 for tax purposes, but also register with the FEC. 527’s report only to the IRS, not the FEC. The FEC has ruled that the commission lacks jurisdiction unless the entity directly advocates for the election or defeat of a candidate.

They must disclose donors’ identities. The 527 designation was created specifically for organizations which intend to engage in political activity. 527s must disclose their contributions and expenditures, including the identity of their contributors.

There is no limit to how much money an individual may contribute to a 527 and no restrictions on who may contribute.

527s may not engage in express advocacy or coordinate with a candidate’s campaign. The most common use for 527s is as entities to fund issue advocacy. Examples of 527 groups include the Swiftboat Veterans for Truth as well as both the Republican and Democratic Governors Associations.

Use of 527s has declined since the Supreme Court’s 2010 decision in Speechnow.org v. FEC, which created Super PACs. Super PACs have all the beneficial features of a 527 but can also directly advocate for or against a candidate.