General Instructions
(References are to the Internal Revenue Code.)

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 sec-
tion 501(c) organization), or other organiza-
tion, organized and operated primarily for
the ‘purpose of accepting contributions or
making expenditures, or both, to infiuence
the selection, nomination, election or ap-
pointment of any individual to any public
office or office in a political organization, or
the election of Presidential or Vice-Presi-
dential electors, must file Form 1120-POL
if such organization has any taxable income
(defined in C below).

2. A newsletter fund (as described in sec-
tion 527(g)) must file Form 1120-POL if it
has politi¢al organization taxable income.
Taxable income is the same as described
in C below with these modifications:

(a) the $100 specific deduction is not

allowed and

(b) the exempt function shall be only

the preparation and circulation of the
newsletter.

For further information,
527(g).

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-
able year directly (or through another
organization) for an exempt function
(defined in E below) and

(ii) have taxable income.

(b) For purposes of a section 501(c) or-
ganization, taxable income shall be an
amount equal to the lesser of:

(i) the aggregate amount expended dur-
ing the taxable year for an exempt
function (defined in E below) or

(ii) the net investment income of such
organization for the taxable 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 exchange
of assets, over the deductions direct-
ly connected with the production of
this income.

Both of the above amounts are computed
by taking into account the modifications
described in C.2. below.

Section 501(c) organizations will not take
into account items taken into account for
purposes of the tax imposed by section
511.

see section

(c) If a section 501(c) organization sets
up a separate segregated fund (section 527
(f)(3)), the taxable income of such fund
will be determined in accordance with in-
struction C.

For further
527(f).

B. Tax Imposed.—The tax imposed con-
sists of a normal tax and surtax computed
as provided in section 11 as though the
political organization were a corporation
and as though the political organization
taxable income was the taxable income

information, see section

referred to in section 11. The surtax ex-
emption (section 11(d)) is not allowed.

C. Taxable Income.—

Note: Campaign contributions are not
includible in income; expenditures for cam-
paign purposes are not deductible.

Taxable income is the excess of:

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

2. the deductions allowed which 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 (relating to special deduc-
tions for corporations) is not allowed.

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

1. contributions of money or other prop-
erty,

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

3. proceeds from a political fundraising
or entertainment event, or proceeds from
the sale of political campaign materials,
which are not received in the ordinary
course of any trade or business,
to the extent such amount is segregated
for use only for the exempt function of the
political organization.

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, nomina-
tion, election, or appointment of ‘any indi-
vidual to any’ Federal, State, or local public
office or office in a political organization, or
the election of Presidential or Vice-Presiden-
tial electors, whether or not such individual
or electors are selected, nominated, elected
or appointed.

F. Where to File.—(Section 501(c) or-
ganizations filing Form 1120~POL must file
this form with the Philadelphia Service
Center), otherwise—

if the ical_ organiza-
tion's main office is lo- Use this address
cated in

WwW WwW

New Jersey, New York City and Internal Revenue Service
counties of Nassau, Rockland, Center
1040 Waverly Avenue

Suffolk, and Westchester
Holtsville, New York 11799

New York (all other counties),
Connecticut, Maine, Massa-
chusetts, New Hampshire,
Rhode Island, Vermont

Internal Revenue Service

enter
310 Lowell Street
Andover, Mass. 01812

Internal Revenue Ser

Center
4800 Buford Highway.
Chamblee, Georgia 30006

Internal Revenue Service
Center

Cincinnati, Ohio 45298

Internal Revenue Service

Alabama, Florida, Georgia,
Mississippi, South Carolina

Michigan, Ohio

Arkansas, Kansas, Louisiana,
New Mexico, Oklahoma, Texas Center
3651 S. Interregional

Highway
Austin, Texas 78740

Internal Revenue Service
enter

1160 West 1200 South
treet

Ogden, Utah 84201

Internal Revenue Service

enter
2306 E. Bannister Road
Kansas City, Missouri

Alaska, Arizona, Colorado,

a,
Gregon, South Dakota,
Utah, Washington, Wyoming

towa, Missouri,
in

64170

Internal Revenue Service
Center

5045 East Butler Avenue

Fresno, California 93888

Internal Revenue Service
Center

3131 Democrat Road

Memphis, Tennessee 38110

California, Hawaii

Indiana, Kentucky, Nort
Caroling, Tennessee, Virgi
West Virginia

Delaware, District of Internal Revenue Service

Maryland, Center
Pennsylvania 11601 Roosevelt Boulevard
Philadelphia, Pa. 19155

G. When to File—in general, Form
1120-POL must be filed on or before the
15th day of the 3rd month after the end of
the taxable year.

You may request an automatic 3-month
extension of time to file Form 1120-POL
by filing Form 7004.

Form 7005 may be used to request an
additional extension but only by organiza-
tions that have previously obtained an
automatic 3-month extension by filing
Form 7004.

H. Period to be Covered by 1976 Re-
turn:—File the 1976 return for calendar
year 1976 and fiscal years beginning in
1976 and ending in 1977. If the return is
for a fiscal year, fill in the taxable year
space on the form.

1. Depositary Method of Tax Payment.—
The balance of the tax due (line 22) must
be paid in full when the return is filed or in
two installments, 50% by the 15th day of
the 3rd month and 50% by the 15th day of
the 6th month after the end of the taxable
year.

Organizations must deposit all income
tax payments, accompanied by a Federal
Tax Deposit Form preinscribed with a Class
Tax Number 503, with an authorized com-
mercial bank depositary or Federal Reserve
bank. Do not remit directly to Internal
Revenue.

In Schedule K, list all Tax Class Number
503 deposits that relate to the taxable year
for which this return is filed and which were
made before or simultaneously with the
filing of this return.

Timeliness of deposits will be determined
by the date the deposit was recorded as re-
ceived by the commercial bank depositary
or Federal Reserve bank.

Organizations needing Federal Tax_De-
posit Forms preinscribed with a Tax Class
Number 503 may obtain them from the In-
ternal Revenue Service Center where they
will file their returns. The application should
include the organization's name, identifica-
tion number (if any), address, and the tax-
able year to which the deposits relate.

J. Change in Accounting Period.—To
change your accounting period, see section
1442-1 of the regulations’ and Form
1128, Application for Change in Accounting
Period.

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




Unless the law specifically permits, you
may not change the method of accounting
used to report income in prior years (for
income as a whole or for any material item)
without first obtaining consent on Form
3115, Application for Change in Accounting
Method.

L. Rounding Off to Whole-dollar
Amounts.—The money items may be shown
as whole-dollar amounts by eliminating any
amount less than 50 cents and increasing
any amount from 50 cents through 99
cents to the next higher dollar.

M. Attachments.—If more space is
needed on forms or schedules, attach sepa-
rate sheets and use the same arrangement
as the printed forms, but show the totals
on the printed forms. Be sure to put the tax-
payer's name and employer identification
number on these separate sheets.

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 the person who prepares the return for
pay is not an employee of a firm, corpora-
tion or another individual, then that person
must sign the return as preparer and enter
his or her social security number and ad-
dress. If the person who prepares the re-
turn for pay is an employee of a firm, cor-
poration or another individual, then’ that
person must sign the return and enter the
employer's name, identification number,
and address. If prepared by the taxpayer's
regular, full-time employee, such as a clerk,
secretary, or bookkeeper, the employee does
not have to sign.

0. Identifying Number.—All political or:
ganizations (including separate segregated
funds described in section 527(f)(3) and
newsletter funds) must use an employer
identification number. If you do not have
an employer identification number for the
political organization, apply for one from
your Internal Revenue Service Center on
Form SS-4, available from any Internal Rev-
enue or Social Security Administration dis-
trict office.

P. Penalties.—

1. A political organization that fails to
file its tax return by the prescribed due
date including any extensions of time for
filing may be subject to a penalty of 5%
a month, up to a maximum of 25%, for
each month the return is not filed.

2. A political organization that fails to
pay the tax when due may be subject to a
penalty of 4% a month or fraction of a
month, up to a maximum of 25%, for each
month the tax is not paid.

The penalties mentioned above are im-
posed on the net amount due—see section
6651(a)(1) and (2).

The above penalties will not be imposed
if the political organization can show that
the failure to file or to pay was due to
reasonable cause and not to willful neglect.

The penalties are in addition to the in-
terest charge imposed on unpaid tax at
a_rate established pursuant to section
6621.

Q. Possession Tax Credit.—See Form
5712 for rules on how to elect to claim the
new possession tax credit (section 936).
Compute the credit on Form 5735 and in-
clude the amount of the credit in the total
for line 7, Schedule A (Form 1120-POL).
Write in the margin next to the entry on line
7, the amount of the credit and identify it as
being a section 936 credit.

R. Estimated Tax, Minimum Tax and In-
vestment Credit.—Estimated Tax, minimum
tax and investment credit do not apply to

political organizations defined in section
527.
S. Financial Statements.—Section 501

(c) organizations do not have to complete
Schedules L and M.

T. Foreign Bank, Securities and Other
Financial Accounts, and Grantors, Transfer-
ors or Beneficiaries of Foreign Trusts.—Form
4683 must be completed by a person:

1. who had any interest in or signature
or other authority over a bank, securities,
or other financial account in a foreign coun-
try (except in a U.S. military banking facility
operated by a U.S. financial institution), or

2. who was the grantor of, or transferor
to, a foreign trust, during any taxable year,
which foreign trust was in being during the
current taxable year, whether or not that per-
son has any beneficial interest in such trust.

Please note that this year Form 4683
must be filed by taxpayers having any in-
terest in a foreign trust. In prior years this
form was required to report an interest in a
trust only if the interest was more than a
50% interest.

Instructions for Schedule D

This schedule provides for the reporting
of sales or exchanges of capital assets. Every
sale or exchange of property must be re-
ported even though no gain or loss is in-
dicated.

For reporting sales or exchanges of prop-
erty other than capital assets including the
sale or exchange of property used in a trade
or business and involuntary conversions
(section 1231), see Form 4797 and related
instructions.

Capital Assets.—Each item of property
held by a political organization (whether or
not connected with a trade or business) is a
capital asset except:

1. inventoriable assets or property held
primarily for sale to customers;

2. depreciable or real property used in
a trade or business;

3. certain copyrights, literary, musical, or
artistic compositions, letters or memoran-
dums, or similar property;

‘Ye US, GOVERNMENT PRINTING OFFICE : 1976—-O-218-117

4. accounts or notes receivable acquired
in the ordinary course of trade or business
for services rendered or from the sale of
property described in (1) above;

5. certain short-term Federal, State, and
municipal obligations; and

6. a publication of the United States Gov-
ernment (including the Congressional Rec-
ord) which is received from the United
States Government or any agency thereof,
other than by purchase at the price at which
it is offered for sale to the public, and which
is held by (a) a taxpayer who So received
such publication, or (b) a taxpayer in whose
hands the basis of such publication is deter-
mined, for purposes of determining gain
from a sale or exchange, in whole or in
part by reference to the basis of such pub-
lication in the hands of a taxpayer described
in 6(a). (Item 6 applies to sales, exchanges,
and contributions made after October 4,
1976.)

Capital Losses.—Capital losses are al-
lowed only to the extent of capital gains.
A net capital loss, however, may be carried
back three years and forward five as a short-
term capital loss. The capital loss may be
carried back only to the extent it does not
increase or produce a net operating loss
in the taxable year to which it is being
carried.

Under the provisions of section 6411, a
quick refund of the tax overpayment created
by the capital loss carryback may be ob-
tained by filing Form 1139.

Basis.—In determining gain or loss, the
basis of property will generally be its cost.
However, where the political organization
receives appreciated property after May 7,
1974, then the basis of this property will
be the same as it would be in the hands of
the transferor, increased by the amount of
gain recognized to the transferor.

Exchange of “Like Kind” Property.—Al-
though no gain or loss is recognized when
property held for productive use in a trade
or business or for investment (not includ-
ing stock in trade or other property held
primarily for sale, nor stocks, bonds, notes,
choses in action, certificates of trust or
beneficial interest, or other securities or
evidences of indebtedness or interest) is
exchanged solely for property of a “like
kind” to be held either for productive use
in a trade or business or for investment,
you must report the transaction on Sched-
ule D or Form 4797, whichever is applicable.
If Schedule D js ‘applicable, identify the
property disposed of in column (a). Enter
the date of acquisition in column (b) and
write the date of exchange in column (c).
Write “like kind exchange” in column (d)
and enter the adjusted basis in column (e).
Enter zero in column (f). (See section 1031.)

Alternative Tax Computation.—lf you
have an excess of net long-term capital gain
over net short-term capital loss, compute the
tax using the alternative method (Part IV)
to determine if the resulting tax is less than
the tax computed using the regular method.


vm 1120-POL U.S. Income Tax Return

for Certain Political Organizations | 1976

Department of the Treasury To be filed by those organizations having taxable income (line 19).
Internal Revenue Service (Under Section 527 of the Internal Revenue Code)
For calendar year 1976 or other taxable year beginning > 1976 and ending 19
Note: If you are a section 501(c) organization and described in instruction A.3, check here » [1].

g | Name of organization Employer identification number (see ins
$s struction 0)

© | Number and street

5 | City or town, State and ZIP code

=

Enter name of candidate D>

The books are in care of > Telephone No.  _..

Located at p>
Important—Fill in all applicable lines and schedules.

1 Dividends (attach schedule). 2 2 6 6 ee ee ee ee ee ee ee ee Ld

2 Interest on obligations of the United States and U.S. instrumentalities . . 2 2 6 + + © + «| 2 |
$3 Other interest 2 6. ee ee ee ee LT
S| 4 Gross rents . 6 6 eee ee ee ee ee el
S| 5 Gross royalties © 2 ee ee ee LS
%| 6 (a) Netcapital gains from line9,ScheduleD. . . » - s+ + + + + ee ee ee ee 6(a)
6 (b) Ordinary gain or (loss) from Part Il, Form 4797 (attach Form 4797) . . « « + + + © + |6(b)

7 Other income (see “Note” in instruction D—attach schedule) . . - 2 s+ e+ se 2 ee ee

8 Total income (add lines 1 through 7)... + + se es

9 Salaries and wages. © 6 6 6 6 ee ee ee ee ee ee ee ee

10 Repairs 2 1 1 we ew ee ee ee ee we we ew ee ee ee ee
Al Rents 2. 6 ee ee ee ee we ew we ee ee ee ee
12 Taxes (attach schedule) . 2 6 ee 8 ee ee ee ee ee ee ee
13 Interest 2 2 2 ee ew we ee ee ew ee ew ee te
14 Depreciation. 6 6 1 6 ee ew ee ee we eee ee ee ee
Other deductions (attach schedule). . . - 2 2 © © © © © © © © ew ee eee
16 Total deductions (add lines 9through 15). «© - 2 2 6 © 2 8 ee ee ee ee
17 Taxable income before specific deduction of $100 (line 8 less line 16). (Section 501(c) organizations

show: (a) amount of net investment income (see Instruction A3(b)(ii)) DP.

(b) aggregate amount expended for an exempt function (attach schedule) >.

Deductions
a

and enter on line 17, the lesser of (a) or (b)). 6 6 6 6 eee ee ee eee ee |Z
18 Less specific deduction of $100 (not allowed for newsletter funds defined under section 527(g)) . |_18.
19 Taxable income (line 17 less line 18)... . + + + ee ee ee ee ee YD

n
°

20 Total tax (from line 10 of ScheduleA). 6 6 6 ee ee ee ee ee
21 Credits:
(a) Tax deposited with Form 7004 (attach copy)... - ee ee ee
(b) Tax deposited with Form 7005 (attach copy)... ee + ee ee
(c) Credit from regulated investment companies (attach Form 2439). . « « | 21

Tax

23 Overpayment (line 21 less line 20)... - - ee 7 ee ee ee tt et el

22 Tax due (line 20 less line 21). See instruction | for depositary method of payment . . . « « |_22

1 Did you, at any time during the taxable year, have any interest in or signature or other authority over a
bank, securities, or other financial account in a foreign country (except in a U.S. military banking facility

If “Yes,” attach Form 4683. (For definitions, see Form 4683.)
2 Were you the grantor of, or transferor to, a foreign trust during any taxable year, which foreign trust was

Foreign Accounts
and
Foreign Trusts

If “Yes,” attach Form 4683. (For definitions, see Form 4683.)

operated by a U.S. financial institution)? . . 6 6 6 6 ee we ee we ww ew ew ee ef Yes [J No

in being during the current taxable year, whether or not you have any beneficial interest in such trust?. .[] Yes [] No

Under penalties of perjury, 1 declare that 1 have exai
‘and ‘complete. Declaration of preparer (other than taxpayer) is based on all information of which the preparer has any’ knowledge.

Preparer's signature (and employer's name, if any)

Tdentifying number (see instructions)

return, including accompanying schedules and statements, and to the best of my knowledge and belief it is true, correct,

‘Address and ZIP Code


Form 1120-POL (1976)

Schedule A.—Tax Computation Schedule

1 Taxable income (line 19, pagel). . 2 - 2 ee wee ee ee

2 46% of the first $25,000 of taxable income onlinel. . . . . 2. 1 1 ewe

3 48% of taxable income on line 1 in excess of $25,000 . . . . . . 2...

4 Totaloflines2and3. . 2. 1. 1 ee ee ee ee soe

5 Income tax (line 4 or alternative tax from line 16, Schedule D below, whichever is lesser) .

6 (a) Work incentive (WIN) credit (attach Form 4874). . . . 2. ee ee
(b) Foreign tax credits (attach Form 1118)... .. . wee

7 Total of lines 6(a) and (b) . . . . woe eee

8 Line 5lessline7. . 2. 2 1 ee ee ee . soe ee

9 Tax from recomputing a prior year WIN credit (attach computation) .

10 _Total tax (add lines 8 and 9). Enter here and on line 20, page 1 -

Schedule D.—Capital Gains and Losses

Short-term Capital Gains and Losses—Assets Held 6 Months or Less

¢. Date sold

b, Date acquired
(mo., day, yr.)

a, Kind of property and description
0 0.) (mo., day, yr.)

(Example, 100 shares of “2” d. Gross sales price

e. Cost or other basis
‘and expense of sale

f. Gain or (loss)
less e)

2 Unused capital loss carryover (attach computation) . . 2. 1 eee ee ee ee
3__Net short-term capital gain or (loss). - . - - - : oe _)
Part Il Long-term Capital Gains and Losses—Assets Held More Than 6 Months
4 Enter section 1231 gain from line 4(a)(1), Form 4797...» - - + 7 + ee -1 4

6 Net long-term capital gain or (loss)... . . . . ++... et 7 T6
[uaa Summary of Schedule D Gains and Losses
7 Enter excess of net short-term capital gain (line 3) over net long-term capital loss (line6) . . - |Z
8 Enter excess of net long-term capital gain (line 6) over net short-term capital loss (line 3) . . - {8
9 Total of lines 7 and 8. Enter here and on line 6(a), pagel. . eee -l9
[fala Alternative Tax Computation (See Instructions for Schedule D)
10 Taxable income (line 19, pagel). ©... ee ee ee ee . {10
11. Excess of net long-term capital gain over net short-term capital loss (line8) . . . . . {at
12 Line 10 less line 11. 2. ew ee « |42
13 46% of the first $25,000 of taxable income online12. . . . 1 ee ee ee » (8
14 48% of taxable income on line 12 in excess of $25,000. . . ........ 14 |
15 30% oflinell. . . . we we 15
16 Alternative tax (total of lines 13, 14, and 15). If applicable, enter here and on line 5, Schedule A 16

Schedule K.—Record of Federal Tax Deposits Class Tax Number 503 (List Deposits in Order of Date

Made—See Instruction I)

Date of

Date of
deposit i

Date of
deposit

Date of Amount Amount Amount

Date of

deposit Amount



Form 1120-POL (1976)

Page 3

Schedule L.—Balance Sheets

Beginning of Taxable Year

End of Taxable Year

Assets (A) Amount (B) Total (C) Amount (D) Total
1 Cash: (a) Savings and interest-bearing accounts .
(b) Other. 2 we ee
2 Accounts receivable net . 2. 2 2 we ee
3 Notes receivable net (attach schedule). . . . 2 -
4 Inventories. 2. ee ee ee ee
5 Government obligations: (a) U.S. and instrumentalities .
(b) State, subdivisions thereof, etc. . . . 2. . «
6 Investments in nongovernment bonds, etc, (attach schedule) .
7 Anvestments in corporate stocks (attach schedule). . . «
8 Loans:
(a) Mortgage loans (number of loans PB» _____) .
(b) Other loans (attach schedule) . . . .
9 Other investments (attach schedule) . . . . . « +
10 Depreciable (depletable) assets (attach schedule):
(a) Held for investment purposes. . . 2 2. ee
(b) Less accumulated depreciation . . . . 1.
(c) Held for campaign purposes. . . «ee ee
(d) Less accumulated depreciation . . . 2.
11 Land: (a) Held for investment purposes. . . . ~~
(b) Held for campaign purposes. . -. 1 ew ee
12 Other assets (attach schedule). . . - . 2 se
13 Total assets . . . sone
Liabi
14 Accounts payable. . . . . « se eee
15 Contributions, gifts, grants, etc. payable ary
16 Mortgages and notes payable (attach schedule). . . .
17 Other liabilities (attach schedule). . . . . . e
18 Total liabilities . . . soe ee
Net Worth (Fund Balances)
19 Principal Fund __
20 Income Fund
21 Total Net Worth (Fund Balances) .  . oo
22 Total liabilities and Net Worth (line 18 plus tine 2). _

Schedule M.—Analysis of Changes in Net Worth

1
2
3
4
5

Total net worth at beginning of year—line 21, column B, Schedule L

Enter amount from line 17, pagel. . . . -
Nontaxable income from contributions . . -
Nontaxable income from other sources . .

Other increases not included above (itemize) >

Total (add lines 1 through 5) . . - - +
Campaign expenses . . - - s+ es we

Expenses attributable to other nontaxable income .

Other decreases not included above (itemize) >

Total of lines7,8and9. . .«
Total net worth at end of year (line é less line 10)—tine 2i, column D, Schedule L..