Who Needs to File Form 8871 and What to Include?
Learn who must file Form 8871, the necessary disclosures, filing process, and implications of late or incorrect submissions.
Form 8871 is a document for political organizations in the United States, serving as a declaration of their intent to operate under tax-exempt status. This form ensures transparency and compliance with IRS regulations, with significant implications for these entities’ financial operations.
Organizations Required to File
Form 8871 is required for political organizations seeking recognition under section 527 of the Internal Revenue Code. These entities influence the selection, nomination, election, or appointment of individuals to public office at the federal, state, or local level. This requirement applies to political action committees (PACs), candidate committees, and local political clubs meeting IRS criteria.
Organizations with gross receipts of $25,000 or more in a taxable year must file Form 8871. This threshold ensures even smaller entities adhere to transparency standards. Filing is necessary to obtain tax-exempt status, and failure to file may result in taxation on income, impacting financial operations.
When and How to File
The IRS requires Form 8871 to be filed within 24 hours of an organization’s establishment. For existing organizations seeking tax-exempt status, the form must be submitted before the exemption applies to their income.
The filing process is conducted through the IRS’s online platform, which provides immediate confirmation of receipt. Organizations must ensure their IRS e-Services account is active and have the necessary login credentials to avoid delays.
Information That Must Be Disclosed
Organizations filing Form 8871 must provide detailed information to comply with IRS requirements. This includes the organization’s formal name, mailing address, and Employer Identification Number (EIN). Accurate information is essential to avoid processing issues. The organization must also declare its purpose, detailing its mission and activities related to influencing public office elections.
The form requires identification of all principal officers, including their names, addresses, and titles, to ensure accountability. It also mandates disclosure of related entities or affiliated groups to highlight potential conflicts of interest. Any changes to the organization’s structure or activities, such as amendments to governing documents, must also be reported. Additionally, contributors providing $200 or more must be disclosed, reinforcing financial transparency and public trust.
Correcting or Amending a Submission
Organizations may need to amend their filings to address errors or reflect changes in operations. Filing an amended Form 8871 promptly is essential to avoid complications with the IRS. Amendments must clearly outline changes, such as updates to principal officers’ details, ensuring accurate records are maintained.
Penalties for Incomplete or Late Filings
Failure to file Form 8871 accurately and on time can result in significant consequences. Noncompliance leads to the loss of tax-exempt status for the affected period, making the organization’s income taxable. This can strain resources, particularly for entities with substantial fundraising activities. Additional penalties may be assessed for failing to disclose required information.
Beyond financial penalties, noncompliance can damage an organization’s reputation. Political organizations depend on public trust and donor confidence, which may erode if they fail to meet regulatory obligations. Donors may hesitate to contribute to organizations perceived as disorganized or lacking transparency. To avoid these risks, organizations should establish compliance systems, including regular audits of filings and deadlines, to maintain good standing with the IRS.