Form 1120-POL (1981)

Page 5

General Instructions only for Fiscal Year
1981-82 Principal Campaign
Committees (Section 527(h))

The Economic Recovery Tax Act of 1981 added new
section 527(h) which defines a principal campaign
committee and provides that this committee will be
subject to a lower rate of tax than other political
organizations.

A principal campaign committee means the political
committee designated only by a candidate for Congress
as his or her principal campaign committee for purposes
of section 302(e) of the Federal Election Campaign
Act of 1971. See section 527(h) of the Code for special
rules regarding the term ‘‘designation.”

Effective for tax years beginning after 1981, the tax
rates have been lowered for these principal campaign
committees. The tax rates changed from 46% of
taxable income; to 16% of the first $25,000 of taxable
income; 19% of the next $25,000 of taxable income;
30% of the next $25,000 of taxable income; 40%
of the next $25,000 of taxable income; and 46% of
taxable income in excess of $100,000.

Because of changes in the tax rates, the proration
rules of section 21 apply. Fiscal year 1981-82
committees must prorate their tax to reflect these
changes. Thus, a fiscal year committee will compute
its tax for the year by prorating a tax for the period
before 1982 and for the period after 1981, using the
tax rates in effect for each period. The accompanying
worksheet for fiscal year 1981-82 provides for such
computation.

This worksheet, which should not be filed, will be
used by fiscal year 1981-82 committees in lieu of line

20 on the 1981 Form 1120-POL and certain lines of
the Tax Computation Schedule on the 1981 Schedule D
(Form 1120).

Computation of Tax.—In computing the tax, the
committee computes a regular tax (Part I) and an
alternative tax (Part Il) for each period and takes
the lower tax for each period. The sum of the
prorated tax for each period is the total on line 16,

art Ill.

Specific Instructions

Part Ill

Line 13, Portion of Tentative Tax.— Multiply
line 12, by:

(a) number of days in tax year before 1/1/82
number of days in tax year

OR

(b) applicable decimal from table below (column (A)).

Taxpayers with a 52-53 week tax year must use
(a) above.

Line 15, Portion of Tentative Tax.—Multiply line
14, by:
(a) number of days in tax year after 12/31/81
number of days in tax year
OR

(b) applicable decimal from table below (column (B)).

Taxpayers with a 52-53 week tax year must use
(a) above.

Table

Fiscal
year

(A). Before 1982
Line 12 x applicable
fraction or decimal

listed below and enter

result on line 13

(B) After 1981
Line 14 x applicable
fraction or decimal
listed below and enter
result on line 15

2/1/81- 1/31/82 334/365
3/1/81— 2/28/82 306/365
4/1/81— 3/31/82 275/365
5/1/81— 4/30/82 245/365
6/1/81— 5/31/82 214/365
7/1/81— 6/30/82 184/365
8/1/81- 7/31/82 153/365
9/1/81— 8/31/82 122/365
10/1/81-_ 9/30/82 92/365
11/1/81-10/31/82 61/365
12/1/81-11/30/82 31/365

or
or
or

or |
or -
or |
or «
or .
or «
or .
or .

915068 31/365 or .084932
838356 59/365 or .161644
753425 90/365 or .246575
671233 120/365 or .328767
586301 151/365 or .413699
504110 181/365 or .495890
419178 212/365 or 580822
334247 243/365 or .665753
252055 273/365 or .747945
167123 304/365 or .832877
084932 334/365 or .915068

343-135-2


Form 1120-POL (1981)

Page 4

Deposit organization income tax pay-
ments with a preinscribed Federal Tax De-
posit (FTD) Form 503. Make these tax de-
posits with either a financial institution
qualified as a depositary for Federal taxes
or the Federal Reserve Bank or Branch
(FRB) servicing the geographic area where
the organization is located. Records of de-
posits will be sent to IRS for crediting to
the organization’s account. See the in-
structions on the back of Form 503 for
more information and exceptions.

You may apply for these FTD Forms 503
from the Internal Revenue Service Center
where the organization files its return. If
you do not have these forms when a depos-
it is due, mail your payment to the In-
ternal Revenue Service Center where the
organization files its return. When apply-
ing for FTD Form 503 (and also when mak-
ing a deposit without FTD Form 503), in-
clude the organization's name, employer
identification number, address, and the
tax year to which the deposits relate.

Penalty for Overstated Tax Deposits.—
If you overstate your deposits, you may be
subject to a penalty. See section 6656(b).

J. Change in Accounting Period.—Be-
fore you can change an accounting period,
you must get the Commissioner's approval
(Regulation section 1.442-1) by filing
Form 1128, Application for Change in Ac-
counting Period. Also see Publication 538,
Accounting Periods and Methods.

K. Accounting Methods.—Taxable in-
come must be computed using the method
of accounting regularly used in keeping
the organization's books and records. In
all cases, the method adopted must clearly
reflect taxable income. (See section 446.)

Unless the law specifically permits
otherwise, the organization may change
the method of accounting used to report
taxable income in earlier years (for income
as a whole or for any material item) only by
first getting consent on Form 3115, Appli-
cation for Change in Accounting Method.
Also see Publication 538, Accounting Pe-
riods and Methods.

L. Rounding Off.—You may show
money items as whole-dollar amounts by
dropping amounts under 50 cents and in-
creasing amounts from 50 to 99 cents to
the next higher dollar.

M. Attachments.—If you need more
space on forms or schedules, attach sepa-
rate sheets to the back of Form 1120-POL.
Attach schedules in alphabetical order and
forms in numerical order. Be sure to put
the taxpayer’s name and employer identi-
fication number (EIN) on each sheet.

N. Signature—The return must be
signed and dated by the president, vice
president, treasurer, assistant treasurer,

chief accounting officer, or any other offi-
cer (such as tax officer) authorized to sign.
A receiver, trustee, or assignee must sign
and date any return required to be filed
on behalf of an organization.

If your organization officer filled in Form
1120-POL, the Paid Preparer’s space un-
der “Signature of officer’ should remain
blank. If someone prepares Form 1120—
POL and does not charge the organization,
that person should not sign the return.
Certain others who prepare Form 1120—
POL should not sign. For example, a regu-
lar, full-time employee of the organization
such as clerk, secretary, etc. does not
have to sign. (This list is not all inclusive.)

Generally, anyone who is paid to pre-
pare Form 1120-POL must sign the re-
turn and fill in the other blanks in the Paid
Preparer's Use Only area of the return.

If you have questions about whether a
preparer is required to sign Form 1120—
POL, please contact an IRS office.

The preparer required to sign the return
MUST complete the required preparer in-
formation and:

@ Sign it, by hand, in the space pro-
vided for the preparer’s signature. (Sig-
nature stamps or labels are not accept-
able.)

© Give a copy of Form 1120-POL to
the taxpayer in addition to the copy filed
with IRS.

Tax return preparers should be famil-
iar with their responsibilities. See Publica-
tion 1045, Information and Order Blanks
for Preparers of Federal Income Tax Re-
turns, for more details.

O. Employer Identification Number.—
All political organizations (including sepa-
rate segregated funds described in section
527(f)(3) and newsletter funds) must use
an employer identification number (EIN).

An organization that does not have an
EIN should apply for one on Form SS—4,
Application for Employer Identification
Number. You can get this form at any IRS
or Social Security Administration office.
Send Form SS—4 to the same Internal Rev-
enue Service Center to which you send
Form 1120—POL. If you have not received
the EIN by the filing time for Form 1120-
POL write ‘Applied for” in the space for
the EIN.

P. Penalties.—

Avoid penalties and interest by correct-
ly filing and paying the tax when due. The
organization may have to pay the following
penalties unless it can show that failure to
file or to pay was due to reasonable cause
and not willful neglect. (These penalties
are in addition to the interest charge on
unpaid tax at a rate under section 6621.)

© A political organization that fails to
file its tax return when due (including any

extensions of time for filing) may be sub-
ject to a penalty of 5% a month, up toa
maximum of 25%, for each month the re-
turn is not filed. (The penalty is imposed
on the net amount due.)

© A political organization that fails to
pay the tax when due may be subject to a
penalty of 14% a month or fraction of a
month, up to a maximum of 25%, for each
month the tax is not paid. (The penalty is
imposed on the net amount due.)

Q. Possessions Tax Credit——See Form
5712 for rules on how to elect to claim the
possessions tax credit (section 936). Com-
pute the credit on Form 5735, and include
the amount of the credit in the total for
Form 1120-POL, line 23. Write in the mar-
gin, next to the entry on line 23, the
amount of the credit and identify it as a
section 936 credit.

R. Estimated Tax, Minimum Tax, Invest-
ment Credit and Jobs Credit.—These
items do not apply to political organiza-
tions defined in section 527.

S. Financial Statements.—Section 501
(c) organizations do not have to complete
Schedules L and M.

T. Foreign Financial Accounts and For-
eign Trusts.—

Question 1: Check the Yes box if either
1 or 2 below applies to you. Otherwise
check the No box.

1. At any time during the year you
had an interest in or signature or other
authority over a bank account, securities
account, or other financial account in a
foreign country, AND

@ The combined value of the accounts
was more than the $1,000 at any time
during the year; AND

@ The account was NOT with a U.S.
military banking facility operated by
a U.S. financial institution.

2. You own more than 50% of the
stock in any corporation that owns one or
more foreign bank accounts.

Get Form 90-22.1, Report of Foreign
Bank and Financial Accounts, to see if you
are considered to have an interest in or
signature or other authority over a bank
account, securities account, or other finan-
cial account in a foreign country.

If you checked Yes for Question 1, file
Form 90-22.1 by June 30, 1982, with the
Department of the Treasury at the address
shown on the form. Form 90-22.1 is not a
tax return, so do not file it with the IRS.

You can get Form 90—22.1 from many
IRS offices.

Question 2: Check the Yes box if you
were a grantor of, or a transferor to, a for-
eign trust that existed during this tax year.

343-135-1


Form 1120-POL (1981)

Page 6

Worksheet for Fiscal Year 1981-82 Principal Campaign Committees—
Tax Computation Schedule (Do Not File—Keep for your Records)

This worksheet is to be used in lieu of line 20 on the 1981 Form 1120-POL and certain lines of the Tax

Computation Schedule on the 1981 Schedule D (Form 1120).

Computation of Regular Tax

Computation at Tax Rates Applicable Before 1/1/82

1 Enter taxable income from Form 1120-POL, line 19, pagel. . . ee ee ee
2 Regular tax—46% of line 1. If applicable, enter here and on line 12, Part ill, Pe ee ee

Computation at Tax Rates Applicable After 12/31/81

3 Regular tax— If the amount Enter on line 3 and, if ap-

on line 1 is: plicable, on line 14, Part tll

Of the
But not amount

Over— over— over—

0 $25,000 16% 0

$25,000 50,000 $4,000+19% $25,000
50,000 75,000 8,750+30% 50,000
75,000 100,000 16,250+40% 75,000
100,000 26,250+46% 100,000

[iaa1m Computation of Alternative Tax

Computation at Tax Rates Applicable Before 1/1/82

4 Taxable income (line 1, Partl). .

5 Enter net capital gain from Schedule D (Form 1120), line 10.

6 Subtract line 5 from line4. .

746% of line6. 6 6 ee
828% ofline5. . 6
9 Alternative tax—Add lines 7 and 8. If this amount is less than the regular tax on line 2, Part I, enter here
and on line 12, Part Ill... se : soe eee

i

Computation at Tax Rates Applicable After 12/31/81

10 Partial tax— If the amount

on line 6 is: Enter on line 10

Of the
But not amount

Over— over— over—

0 $25,000 16% t)

$25,000 50,000 $4,000+19% $25,000
50,000 75,000 8,750+30% 50,000
75,000 100,000 16,250+40% 75,000
100,000 . 26,250+46% 100,000

-

11 Alternative tax—Add lines 8 and 10. If this amount is less than the regular tax on line 3, Part I, enter here
and on line 14, Part ill. . Se

HEEnaM Proration of Tentative Taxes

12 Tentative tax (regular tax from line 2, or alternative tax from line 9, whichever isless). « « + + + ©
13 Portion of tentative tax before 1/1/82—See instructions for computation. . . - + + + s+ +
14 Tentative tax (regular tax from line 3, or alternative tax from line 11, whichever isless). . » + + +

15 Portion of tentative tax after 12/31/81—See instructions for computation. . . soe eee
16 Income tax—Add lines 13 and 15. Enter here and on Form 1120-POL, line 21, page L. ee

area tnd ated fot
alas [sls =

| |

3x U.S GOVERNMENT PRINTING OFFICE : 1981—O-343-135

343-135-2


om 1120-POL U.S. Income Tax Return

for Certain Political Organizations

OMB No. 1545-0129

1981

Department of the Treasury To be filed by those organizations having taxable income (line 19).

Internal Revenue Service b> For Paperwork Reduction Act Notice, see instructions on page 3.

For calendar year 1981 or other tax year beginning +1981 and ending 19.
Note: If you are a section 501(c) organization (see instruction A.3) or a separate segregated fund described in section 52/(f)(3), check here > [_].
‘| Name of organization Employer identification number (see instruction 0)
=

= | Number and street Date organization formed

§ | City or town, State and ZIP code If you are a fiscal year principal campaign commit-
= tee (see instructions on page 5), check here > []

Enter name of candidate > .

The books are in care of >

Located at D> = Telephone No. >
1 Dividends (attach schedule). . . . . . _ a
© 2 Interest on obligations of the United States and U.: s. instrumentalities ee ry
| 3 Otherinterest 2. 6...
S| 4 Gross rents.
°° 5 Gross royalties . . . a soe
g 6 (a) Capital gain net income from Schedule D (Form 1120), line 11 (attach separate Schedule D (Form 1120) aoe
6 (b) Net gain or (loss) from Form 4797, line 11(a), Part Il (attach Form 4797). . . . « «© +
7 Other income (see ‘“‘Note” in instruction D—attach schedule) . rs
8 Total income (add lines 1 through 7)... - - : ee ee
9 (a) Salaries and wages ... 9(b) Less WIN credit from Form 4874, line 12... + Balance p>
10 Repairs. ww
Al Rents. . 6 6 ee ee ee
12 Taxes se ee ee
13 Interest © 6 1 ee ee ee ee ee ee ee
2 | 14 Depreciation from Form 4562 (attach Form 4562) .. ., less depreciation claimed
2 elsewhere on the return ..... ce ee ee ee ee ee Balance >
3 15 Other deductions (attach schedule). 6 6 1. ee
a 16 Total deductions (add lines 9 through 15). . . . « Py
17 Taxable income before specific deduction of $100 (line 8 less tine 16). (Section 501(c) organizations
show: {a) amount of net investment income (see instruction A3(b)(ii)) >.
(b) aggregate amount expended for an exempt function (attach schedule) >.
and enter on line 17, the lesser of (a) or(b)). «6 6 ee ee ee ee ee ee
18 Less specific deduction of $100 (not allowed for newsletter funds defined under section 527(g)) .
19 Taxable income (subtract line 18 from line 17)... + + : Ce er ee ee ey
20 46% of line19. . . . ee ey
21 Income tax (line 20 or alternative tax from Schedule D (Form 1120), line v7, whichever is less). .
22 (a) Work incentive (WIN) credit (attach Form 4874). . . 2. 2. 2 wwe
(b) Foreign tax credit (attachForm 1118)... 2...) ee ee
x | 23 Total—Add lines 22(a) and (by. © 2 6 ee ee
| 24 Total tax—Subtract line 23 from line 21. 6 1 1 ee ee ee ee
25 Credits: (a) Tax deposited: Form 7004 .. Form 7005 (attach) .. Total >
(b) Credit from regulated investment companies (attach Form 2439) .
26 Tax due (subtract line 25 from line 24). See instruction | for depositary method of Payment . we
27 Overpayment (subtract line 24 from line 25). . . . «1. wee
2 | 1 At any time during the tax year, did you have an interest in or a signature or other authority over a bank
£2 | account, securities account, or other financial account in a foreign country (see instruction T)?. . . . [] Yes [J No
B23 z §| 2 Were you the grantor of, or transferor to, a foreign trust which existed during the current tax year, whether
33 ‘S| or not you have any beneficial interest in it?. . coe eee ee ee ee ew ee Yes [No
2s If “Yes,” you may have to file Forms 3520, 3520-A or 7926.
Pl Under penalties of perjury, | declare that | have examined this return, including accompanying schedules and statements, and to the best
lease of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which
. preparer has any knowledge.
Sign
Here Pama of officer Date a Title
Paid Freparers > Date l Check if Prepare’ soci sear TiO.
Preparer’s | -Fenve name (or reo ; :
Use Only | yours, if self-employed) | Et. No. be £
and address ZIP code D>

343-135-1


Form 1120-POL (1981)

Schedule L.—Balance Sheets

Assets

1 Cash: (a) Savings and interest-bearing accounts. . . . |Z

ry ins (number of loans P> yee
(attach schedule) . 2... ee
er stments (attach schedule) . . . . . ee

epret (depletable) assets (attach schedule):
(a) Held for
ess a

12 Other assets (attach schedule)
13 Total assets . .

18 Totalliabilities. 2. 2. 1 ee we
Net Worth (Fund Balances)

22 Total Liabilities and Net Worth (line 18 plus line 21)...

nee Wd

Schedule M.—Analysis of Changes in Net Worth

1 Total net worth at beginning of year—from Schedule L, line 21,

10 Total of lines 7 through9 .

11 Total net worth at end of year (subtract line 10 from line 6)—Th

column (B). 2 ee ee ee

2 Enter amount from line17,pagel. 2 6 6 ee ee ee ee

is equals Schedule L, line 21, column (D) .



Form 1120-POL (1981)

Page 3

General Instructions
(References are to the Internal Revenue Code.)
Paperwork Reduction Act Notice

The Paperwork Reduction Act of 1980 says we must
tell you why we are collecting this information, how
we will use it, and whether you have to give it to us.
We ask for the information to carry out the Internal
Revenue laws of the United States. We need it to
ensure that you are complying with these laws and
to allow us to figure and collect the right amount of
tax. You are required to give us this information.

Note: Form 1120-POL filers who report
sales or exchanges of capital assets must
now use Schedule D (Form 1120). This
schedule can be obtained from most Inter-
nal Revenue offices.

Effective for tax years beginning after
1981, a principal campaign committee,
designated only by a candidate for Con-
gress, will be subject to a lower tax rate.
See pages 5 and 6 for further information.

A. Who Must File Form 1120-POL.—
1. A political organization, that is, a
party, committee, association, fund (in-
cluding a separate segregated fund (de-
scribed in section 527(f)(3)) set up by a
section 501(c) organization), or other or-
ganization, organized and operated pri-
marily for the purpose of accepting contri-
butions or making expenditures, or both, to
influence the selection, nomination, elec-
tion, or appointment of any individual to
any public office or office in a political or-
ganization, or the election of Presidential
or Vice-Presidential electors, must file
Form 1120-POL if such organization has
any taxable income (defined in C below).
2. A newsletter fund (as described in
section 527(g)) must file Form 1120—POL
if it has political organization taxable in-
come. Taxable income is the same as
described in C below with these modifica-
tions:
(a) the $100 specific deduction is not
allowed and
(b) the exempt function is only the
preparation and circulation of the
newsletter.
For further information, see section
527(g) and Regulation section 1.527-7.

3. (a) Under section 527(f), certain or-
ganizations described in section 501(c)
and exempt from tax under section 501(a),
must file Form 1120—POL if they:

(i) expend any amount during the
tax year directly (or through
another organization) for an exempt
function (defined in E below) and

(ii) have taxable income.

(b) For a section 501(c) organization,
taxable income is the lesser of:

(i) the amount expended during the tax
year for an exempt function (de-
fined in E below) or

(ii) the net investment income of the
organization for the tax year. Net
investment income, for this pur-

pose, means the gross amount of
interest, dividends, rents, royalties,
plus the excess (if any) of gains
from the sale or exchange of assets
over the losses from the sale or ex-
change of assets, over the deduc-
tions directly connected with the
production of this income.

Both of these amounts are computed
with the modifications described in C.2.
below.

Section 501(c) organizations exclude
those items taken into account for the tax
imposed by section 511.

(c) If a section 501(c) organization sets
up a separate segregated fund (section 527
(f)(3)), the taxable income of the fund is
determined as described in instruction C.

For more information, see section 527
(f) and Regulation section 1.527-6.

B. Tax Imposed.—The tax imposed
is computed by multiplying the political or-
ganization taxable income by 46%.

A fiscal year 1981-82 organization that
is a principal campaign committee (section
527(h)) should see pages 5 and 6 of the
instructions to compute its tax. Please be
certain to check the box on page 1 of Form
1120-POL.

C. Taxable Income.—

Note: Generally, campaign contribu-
tions are not includible in income; expendi-
tures for campaign purposes are not de-
ductible. (See instruction D below.)

Taxable income is the excess of:

1. gross income for the tax year
(excluding any exempt function income
defined below) over

2. the deductions allowed that are di-
rectly connected with the production of
gross income (excluding exempt function
income) computed with the following modi-
fications—

(a) a specific deduction of $100 is

allowed,

(b) a net operating loss deduction (sec-

tion 172) is not allowed, and

(c) a deduction under part VIII of sub-

chapter B (special deductions for
corporations) is not allowed.

See Regulation sections 1.527—4 and
1.527-5.

D. Exempt Function Income.—Exempt
function income is any amount received as:

1. contributions of money or other
property,

2. membership dues, fees, or assess-
ments from members of the political
organization,

3. proceeds from a political fund-rais-
ing or entertainment event, or proceeds
from the sale of political campaign ma-
terials, that are not received in the ordi-
nary course of any trade or business, or

4. proceeds from the conducting of any
bingo game as defined in section 513(f)(2),

to the extent this amount is segregated
for use only for the exempt function of the
political organization.

See Regulation section 1.527-3.

Note: Income received in the course of
an ordinary trade or business is to be in-
cluded in line 7, “other income,” page 1.

E. Exempt Function.—For purposes of
section 527, the term ‘exempt function”
means the function of influencing or at-
tempting to influence the selection, nomi-
nation, election, or appointment of any
individual to any Federal, State, or local
public office or office in a political organi-
zation, or the election of Presidential or
Vice-Presidential electors, whether or not
the individual or electors are selected,
nominated, elected, or appointed.

See Regulation section 1.527-2(c).

F. Where to File.—

If the political organiza-
tion's main office is lo-
cated in

Vv

New Jersey, New York City and
counties of Nassau, Rockland,
Suffolk, and Westchester

Use the following In-
ternal Revenue Serv-
ice Center address

Vv

Holtsville, NY 00501

New York (all other cou
Connecticut, Maine,
chusetts, New Hampshire,
Rhode island, Vermont

‘Andover, MA 05501

Alabama, Florida, Georg!
Mississippi, South Caroli

Michigan, Ohio

Arkansas, Kansas, Louisiana,
New Mexico, Oklahoma, Texas

Alaska, Arizona, Colorado,
Idaho,’ Minnesota, Montana,
Nebraska, Nevada, North
Dakota, Gregon, South Dakota,
Utah, Washington, Wyoming

Atlanta, GA 31101

Cincinnati, OH 45999

Austin, TX 73301

Ogden, UT 84201

linois, towa, Missouri,

{linois, Kansas City, MO 64999

California, Hawaii Fresno, CA_93888

icky, North
jessee, Virginia,

Memphis, TN 37501

Delaware, District of
Columbia, Maryland,
Pennsylvania

Philadelphia, PA 19255

G. When to File——In general, an or-
ganization must file Form 1120—POL by
the 15th day of the 3d month after the end
of the tax year.

File Form 7004 to request an automatic
3-month extension of time to file Form
1120-POL.

File Form 7005 to request an additional
extension after obtaining an automatic 3-
month extension by filing Form 7004,

H. Period covered.—File the 1981 re-
turn for calendar year 1981 and fiscal
years that begin in 1981 and end in 1982.
For a fiscal year, fill in the tax year space
at the top of the form.

I. Depositary Method of Tax Payment.—
The organization must pay the tax due
either 1. in full when the return is filed or
2. in two equal installments. The install-
ments are due by the 15th day of the 3d
month and the 15th day of the 6th month
after the end of the tax year.

343-135-1