Number: RS22895
Title: 527 Groups and Campaign Activity: Analysis Under Campaign Finance and Tax Laws
Authors: L. Paige Whitaker and Erika Lunder, American Law Division 
Abstract: During recent election cycles, there has been controversy regarding the increased campaign-related activity of 527 groups and to what extent they are regulated under federal law. The controversy stems from the intersection between the Federal Election Campaign Act (FECA), which regulates "political committees," and Section 527 of the Internal Revenue Code (IRC), which provides tax-exempt status to "political organizations." Some groups that qualify for beneficial tax treatment as "political organizations" seemingly intend to influence federal elections in ways that may place them outside the FECA definition of "political committee." This report refers to this subset of Section 527 political organizations as 527 groups or 527s. Considerable debate has been generated about the extent to which FECA currently regulates 527 groups as "political committees" and the constitutional parameters of such regulation. The 527 Reform Act of 2007 (H.R. 420 and S. 463) would amend FECA to generally treat all Section 527 political organizations active in federal elections as "political committees."
Pages: 6
Date: June 12, 2008