Along comes the Federal Election Commission if you’re involved with a PAC or SuperPAC. That’s on top of the IRS and your state’s requirements.
It is, in the words of Teri Garr in the movie Young Frankenstein “a puzzlement.” The IRS has myriad requirements, your states add to the pile…and then you get the Federal Election Commission weighing in with considerable authority on PACs and SuperPACs.
Here’s some of what they have to say:
PACs include separate segregated funds (SSFs), nonconnected committees and Super PACs.
SSFs and nonconnected committees
SSFs are political committees established and administered by corporations, labor unions, membership organizations or trade associations. These committees can solicit contributions only from individuals associated with a connected or sponsoring organization.
By contrast, nonconnected committees — as their name suggests — are not sponsored by or connected to any of the aforementioned entities and are free to solicit contributions from the general public.
Super PACs (independent expenditure only political committees) and Hybrid PACs (political committees with non-contribution accounts)
Super PACs (independent expenditure only political committees) are committees that may receive unlimited contributions from individuals, corporations, labor unions and other PACs for the purpose of financing independent expenditures and other independent political activity.
Hybrid PACs (political committees with non-contribution accounts) solicit and accept unlimited contributions from individuals, corporations, labor organizations and other political committees to a segregated bank account for the purpose of financing independent expenditures, other ads that refer to a federal candidate, and generic voter drives in federal elections, while maintaining a separate bank account, subject to all the statutory amount limitations and source prohibitions, that is permitted to make contributions to federal candidates.
A Leadership PAC is a political committee that is directly or indirectly established, financed, maintained or controlled by a candidate or an individual holding federal office, but is not an authorized committee of the candidate or officeholder and is not affiliated with an authorized committee of a candidate or officeholder. Members of Congress and other political leaders often establish Leadership PACs in order to support candidates for various federal and nonfederal offices.
Like other multicandidate PACs, a Leadership PAC may contribute up to $5,000 per election to a federal candidate committee.
Want to know more?
Here’s a little “light reading” from the Federal Election Commission.
And some more on Ballotpedia.com
Clearly, successful political organization accounting is a lot more than setting up a chart of accounts and doing basic bookkeeping. To keep you safe, secure, and compliant with all regulatory bodies, take the time to hire the right specialist.
Political organization accounting and compliance are critically important to success. Accounting done right can win the day. Accounting done wrong can land you in huge trouble with the IRS or state, and even the Federal Election Commission—which does have requirements tied to state as well as federal organizations. Consequences of inaccurate, incomplete, or untimely accounting reporting can include huge monetary penalties, legal prosecution, and destruction of reputation once the word gets out.
John P. Morse, CPA, former Colorado Senate President, knows politics and political organization accounting and compliance inside and out. He and his team are specialists in helping tax-exempt political organizations, including such political action committees as PACs and SuperPACs.
Schedule a call.