I do not say this lightly. I have repeatedly spoken ad nauseum with other accountants about IRC 527.
It is a very strange provision that almost never comes up. Except now it is.
Man, the way it goes in a political campaign — there are two potential sources of “income” — exempt receipts and non exempt. When they are not exempt the campaign has to file an 1120-PL — and report those and pay corporate taxes. It is not uncommon since the service even has a form for it, right??
IF a campaign accepts donations not exempt (LIKE TAKING MONEY FROM A HOSTILE FOREIGN POWER) it may or may not be illegal — but it is NOT exempt. IE they have to pay a tax on it — federal and state. Big taxes. Don’t have to prove intent at all — just that it was a non-exempt contribution. Not difficult. They may claim they did not knowingly accept them — does not matter at all — not for the tax man. The penalties are f-cing incredible. They have little left for 2020 really.
SO — who filed 1120-PLs exactly?? I have to assume they did not pay any taxes on them or they would have to disclose . Lets find out.
I am just one little piss ant accountant looking at this — understand, there are about 25,000 of us coming at this “problem” — how would you fare getting “audited” 25,000 times?
I only know one maybe two people in the entire congress capable at looking at this as a tax issue — and it may become a tax issue. Like Al Capone became a “tax issue”.
Pretty sure I am looking at this right.