Form 1120-POL (1989)

Page 4

An organization that does not have an EIN
should apply for one on Form SS-4,
Application for Employer Identification
Number. This form may be obtained at most
IRS or Social Security Administration
offices. Send Form SS-4 to the same
Internal Revenue Service Center to which
Form 1120-POL is mailed. If the EIN has
not been received by the filing date for Form
1120-POL, write “Applied for” in the space
for the EIN.

For more information concerning an EIN,
see Publication 583.

Final Return, Change of Address,
Amended Return.—If this is a final return,
or the organization’s address has changed
since the previous return was filed, or the
organization is filing an amended return,
check the appropriate block.

Income and Deductions. —Campaign
contributions and other exempt function
income are not includible in income,
likewise, campaign expenditures and other
exempt function expenditures are not
deductible. Generally, to be deductible in
computing political organization taxable
income, expenses must be directly
connected with the production of political
organization taxable income. In those cases
where expenses are attributable to the
production of both exempt function income
and political organization taxable income,
the expenses should be allocated ona
reasonable and consistent basis; only the
portion allocable to the production of
political organization taxable income may
be deducted.

Line 7, Other income and nonexempt
function expenditures.— Enter the total
income from other sources, such as income
from sources described in instruction C2
that was not properly segregated for exempt
functions and income received in the
course of an ordinary trade or business.
Also include on this line the total
expenditures that were made from exempt
function income, that were not for an
exempt function and that resulted ina
direct or indirect financial benefit to the
political organization. Attach a schedule
listing all income and expenditures included
on line 7.

Lines 17(a) and 17(b), Taxable income
before specific deduction of
$100.—Complete these lines only if your
organization is a section 501(c)
organization. For a description of the
amounts to be entered on these lines, see
the definition of taxable income for section
501(c) organizations in instruction Clc.
Line 17(c), Taxable income before
specific deduction of $100.—Political
organizations, newsletter funds, and
separate segregated funds: Subtract line 16

from line 8 and enter the result on line
17(c). Section 501(c) organizations enter
on line 17(c) the lesser of line 17(a) or line
17(b).

Line 20, Income tax.—The rate of tax
imposed depends on whether the political
organization is a principal campaign
committee as defined in section 527(h) and
instruction C4. The tax rate is lower fora
principal campaign committee.

Political organization not a principal
campaign committee.—A political
organization that is not a principal
campaign committee computes its tax as
follows: Multiply line 19, Form 1120-POL
by 34% to figure the tax under section
527(b). Enter the result on line 20, Form
1120-POL.

Principal campaign committee (section
527(h)).—A political organization that is a
principal campaign committee of a
candidate for Congress computes its tax as
follows: Complete lines 1 through 10,
below, and enter the amount from line 10
on line 20, Form 1120-POL.

1. Enter taxable income (line 19,
Form 1120-POL) .

2. Enter the smaller of line 1 or

3. Subtract line 2 from line 1

4. Enter the smaller of line re3 or
$25,000

5. Subtract line 4 from line 3
6. Enter 15% of line 2
7. Enter 25% of line 4
8. Enter 34% of line 5

9. Ifline 1 is greater than
$100,000, enter the lesser of:
59 of the excess over
$100,000; or $11,750

10. Add lines 6 through 9. Enter

here and on line 20, Form
1120-POL . .

Note: Estimated tax, alternative minimum
tax, and environmental tax do not apply to
political organizations.

Line 21, Credits. —The organization may
qualify for any of the following credits:

Foreign tax credit. See Form 1118,
Computation of Foreign Tax Credit—
Corporations.

Possessions tax credit. See Form 5712,
Election to be Treated as a Possessions
Corporation Under Section 936, and Form
5735, Computation of Possessions
Corporation Tax Credit Allowed Under
Section 936.

Research credit. See Form 6765, Credit
for Increasing Research Activities, and
section 41.

Credit for fuel produced froma
nonconventional source. See section 29 for
a definition of qualified fuels, provisions for
figuring the credit, and other special rules.

Alcohol fuel credit. See Form 6478,
Credit for Alcohol Used as Fuel, and
section 40,

Enter the total amount of credits on line
21 and attach the appropriate forms.

Note: /nvestment credit and jobs credit do
not apply to political organizations.

Additional Information

Foreign Financial Accounts and Foreign
Trusts.—

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

1. At any time during the year the
organization had an interest in, 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 $10,000 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. The organization owns more than 50%
of the stock in any corporation that owns
one or more foreign bank accounts.

Get Form TD F 90-22.1, Report of
Foreign Bank and Financial Accounts, to
see if the organization is considered to have
an interest in or signature or other authority
over a financial account in a foreign country
(such as a bank account, securities
account, or other financial account).

If “Yes” is checked for Question 1, file
Form TD F 90-22.1 by June 30, 1990, with
the Department of the Treasury at the
address shown on the form. Form TD F 90-
22.1 is not a tax return, so do not file it with
Form 1120-POL.

Form TD F 90-22.1 may be obtained from
IRS Forms Distribution Centers.

Also, if “Yes” is checked for this question,
write the name of the foreign country or
countries. Attach a separate sheet if more
space is needed.

Question 2: Check the “Yes” box if the
organization was a grantor of, ora
transferor to, a foreign trust that existed
during this tax year.


1120-POL U.S. Income Tax Return OMB No, 1545.0129
Form for Certain Political Organizations
Department of the Treasury > For Paperwork Reduction Act Notice, see instructions on page 2. al 9 8 9
Internal Revenue Service > To be filed by organizations having taxable income (line 19).
For calendar year 1989 or tax year beginning 1989, and ending 119
Note: If you are a section 501(c) organization (see instruction B3) or a separate segregated fund described in section 527(f)(3), check here > ia]
] Name of organeation Employer identification number
2
5 | Number and street (or P.O. box number if mails not delivered to street address) Date organization formed
€
51 Gy ortown, State, and ZIP code this sa principal campaign committee, and itis,
$ the ONLY political committee, check here. . Oo
§ If this is a principal campaign committee, but is NOT
z the only political committe, check here and atacha
copy of designation (See instruction C4)
The books are in care of © Enternameofcandidatem®
Located at > Telephone No. >
Check applicable boxes: (1) C] Finalreturn (2) L]) _Changeinaddress _(3) L] Amended return
1 Dividends (attach schedule). 2 2 1.) 1 ee ee ee ee ee ED
2 Interest . 2
e| 3 Gross rents 3
5] 4 Grossroyalties. . . . . 4
zg 5 Capital gain net income (attach Schedule D (Form 1120) Coe ee ee EB
6 Net gain or (loss) from Form 4797, Part ll, line 18 (attach Form 4797), . . . . . 2... .L6
7 Other income and nonexempt function expenditures (see instructions). Z
8 Total income (add lines 1 through 7) eo 8
9 Salaries and wages 9
10 Repairs . 10
11 Rents il
12 Taxes 12
2/13 Interest . 13
13] 14 Depreciation (attach Form 4562) Co ee ee ee. L4
$]15 Otherdeductions(attachschedule). . . 2 2. ee ee ee AS
3 16 Total deductions (add lines9through15). . . . . LAs
17 Taxable income before specific deduction of $100 (see instructions). Section 501(c) organizations show:
a amount ofnetinvestmentincome. . . . a -
b aggregate amount expended for an exempt function (attach schedule) JF 17¢
18 Less specific deduction of $100 (not allowed for newsletter funds defined under section 527() . . 18
19_Taxable income (subtract line 18 from line17c)_. . re | 19
20 Income tax (see instructions) . 20
21 Credits (see instructions) ee ee LAD
22 Total tax (subtract line 21 from line 20) rr 2
%|23 Payments: a Tax deposited with Form7004.. . . . . 23a
Fe b Credit from regulated investment companies (attach Form 2439) 23b
¢ Credit for Federal tax on fuels (attach Form 4136). . [23¢ 23d
24 Tax due (subtract line 23d from line 22). See instruction D3 for depostary method of payment. . . 24
25 Overpayment (subtract line 22 fromline23d) . . . . . . . . ee eee 2)
c 1 At any time during the tax year, did the organization have an interest in or a signature or other authority over a financial account in a
as foreign country (such as a bank account, securities account, or other financial account)? (See instructions.) . . Olyes CINo
§ Hy If “Yes,” enter the name of the foreign country >__
= 5 2 Was the organization the grantor of, or transferor to, a foreign trust that existed during the current tax
3s year, whether or not the organization has any beneficial interest init? . . . . . . . . . « » « D1Y¥es LINo
<= If “Yes,” the organization may have to file Forms 3520, 3520-A, or 926.
3 Enter the amount of tax-exempt interest received or accrued during the taxyear_. . . . >| $ |

Under penalties of perjury, | declare that | have examined this return, including accompanying schedules and statements, and to the best of my knowledge and

Please | telief, itis true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

Sign
Here |P Signature of officer Date a
Paid Preparer’s Date Check if Preparers socel security no.
Preparer's signature self-employed » C]
Firm's name (or
Use Only | yours, ifseif-employed) >> EJ. No.
and address ZIP code



Form 1120-POL (1989)

Page 2

General Instructions
(Section references are to the Internal
Revenue Code unless otherwise noted.)
Paperwork Reduction Act Notice.—We
ask for this information to carry out the
Internal Revenue laws of the United States.
We need it to ensure that taxpayers 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.
The time needed to complete and file this
form will vary depending on individual
circumstances. The estimated average time
is:

Recordkeeping . . 14hrs., 35 min.
Learning about the

law or the form . 6 hrs., 23 min.
Preparing the form . 15hrs., 17 min.
Copying, assembling,

and sending the

form to IRS 2hrs., 25 min.

If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form more
simple, we would be happy to hear from
you. You can write to the Internal Revenue
Service, Washington, DC 20224, Attention:
IRS Reports Clearance Officer, T:FP; or the
Office of Management and Budget,
Paperwork Reduction Project (1545-0129),
Washington, DC 20503.

A. Purpose of Form.—Form 1120-POL is
used to report the taxable income and
income tax liability of political organizations
(including principal campaign committees),
newsletter funds, and certain exempt
organizations.

B. Filing Form 1120-POL.—Who Must File

1. A political organization, that is, a party,
committee, association, fund (including a
separate segregated fund described in
section 527(f)(3) set up by a section 501(c)
organization), or other organization,
organized and operated primarily for the
purpose of accepting contributions or
making expenditures, or both, to influence
the selection, nomination, election, or
appointment of any individual to any public
office or office in a political organization, or
the election of Presidential or Vice-
Presidential electors, must file Form 1120-
POL if such organization has any political
organization taxable income.

2. A newsletter fund, that is, a fund
established and maintained by an individual
who holds, has been elected to, or isa
candidate (as defined in section 527(g)(3))
for nomination or election to any Federal,
state, or local elective public office for use
by such individual exclusively for the
preparation and circulation of such
individual's newsletter, must file Form
1120-POL if it has political organization
taxable income.

3. Under section 527(f), certain
organizations 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
(as defined in instruction C3 on page
3), and

(ii) have political organization taxable
income.

Note: A separate segregated fund
maintained by a section 501(c) organization
is treated as a separate entity and is taxed
like an ordinary political committee. For
more information, see section 527(f),
Regulations section 1.527-6, and the
definitions in instruction C below.

When To File

In general, an organization must file Form
1120-POL by the 15th day of the 3rd month
after the end of the tax year.
Extension.—File Form 7004, Application
for Automatic Extension of Time To File
Corporation Income Tax Return, to request
an automatic 6-month extension of time to
file Form 1120-POL.

Period Covered.—File the 1989 return for
calendar year 1989 and for fiscal years that
begin in 1989 and end in 1990. Fora fiscal
year return, fill in the tax year space at the
top of the form.

Where To File

If the political
organization's main
office is located in:

Use the following
Internal Revenue
Service Center address

Vv v
New Jersey, New York (New
York City and counties of Holtsville, NY 00501

Nassau, Rockland, Suffolk,
and Westchester)

New York (all other counties),
Connecticut, Maine,
Massachusetts,

New Hampshire,

Rhode Island, Vermont

Andover, MA 05501

Florida, Georgia,

South Carolina Atlanta, GA 39901.

Kansas, New Mexico,

Oklahoma, Texas Austin, TX 73301

Indiana, Kentucky, Michigan,

Ohio, West Virgina Cincinnati, OH 45999

Illinots, lowa, Minnesota,

Missoun, Wisconsin Kansas City, MO 64999

Alabama, Arkansas,
Louisiana, Mississipp!,
North Carolina, Tennessee,

Memphis, TN 37501

Alaska, Arizona, California
(counties of Alpine, Amador,
Butte, Calaveras, Colusa,
Contra Costa, Del Norte, El
Dorado, Glenn, Humboldt,
Lake, Lassen, Marin,
Mendocino, Modoc, Napa,
Nevada, Placer, Plumas,
Sacramento, San Joaquin,
Shasta, Sierra, Siskiyou,
Solano, Sonoma, Sutter,

Ogden, UT 84201

Tehama, Trinity, Yolo, and
Yuba), Colorado, Idaho,
Montana, Nebraska, Nevada,
North Dakota, Oregon, South
Dakota, Utah, Washington,
Wyoming

California (all other

counties), Hawaii Fresno, CA 93888

Delaware, District of
Columbia, Maryland,
Pennsylvania, Virginia

Philadelphia, PA 19255

Signature

The return must be signed and dated by the
president, vice-president, treasurer,
assistant treasurer, chief accounting
officer, or any other organization officer

(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 an organization officer filled in Form
1120-POL, the Paid Preparer's space under
“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 regular, full-time
employee of the organization, such as a
clerk, secretary, etc., should not sign.

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

The preparer required to sign the return
must complete the required preparer
information and:

e Sign it, by hand, in the space provided for
the preparer’s signature. (Signature stamps
or labels are not acceptable.)

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

Tax return preparers should be familiar
with their responsibilities. See Publication
1045, Information for Tax Practitioners, for
more details.

1. Political Organization Taxable
Income.—a. For political organizations (as
defined in instruction B1 above), including
separate segregated funds, taxable income
is the excess of:

(1) gross income for the tax year
(excluding any exempt function income as
defined in instruction C2 on page 3) over

(2) the deductions allowed that are
directly connected with the production of
gross income (excluding exempt function
income) computed with the following
modifications:

(a) a specific deduction of $100 is

allowed;
(b) no net operating loss deduction
(section 172) is allowed; and

(c) no deduction under Part VIII of
subchapter B (special deductions for
corporations) is allowed.

See Regulations sections 1.527-4 and
1527-5.

b. For newsletter funds, taxable income is
computed as shown above except that the
specific deduction of $100 is not allowed.

c. For section 501(c) organizations,
taxable income is the lesser of:

(1) the amount expended during the tax
year directly or through another
organization for an exempt function (as
defined in instruction C3 on page 3), or

(2) the net investment income of the
organization for the tax year. Net
investment income, for this purpose, means
the gross amount of interest, dividends,
rents, and 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 directly
connected with the production of this
income.


Form 1120-POL (1989)

Page 3

Both of these amounts are computed
with the modifications described in
instruction Cla(2) on page 2.

Note: /n computing political organization
taxable income, section 501(c)
organizations should exclude those items
taken into account for the tax imposed by
section 511 (relating to tax on unrelated
business income) .

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

a. contributions of money or other
property;

b. membership dues, fees, or
assessments from members of the political
organization;

c. proceeds from a political fundraising or
entertainment event, or proceeds from the
sale of political campaign materials, if such
amounts are not received in the course of a
trade or business; or

d. proceeds from conducting a bingo
game as defined in section 513(f)(2).

These amounts are exempt function
income only to the extent that they are
segregated for use only for the exempt
function of the political organization. In
addition, if a political organization expends
any amount of its exempt function income
for other than an exempt function, and the
expenditure results in a direct or indirect
financial benefit to the political
organization, the amount of such
expenditure must be included in the
political organization's gross income. See
the instructions for line 7.

See Regulations section 1.527-3 and
1527-5.

3. Exempt Function.—a. For political
organizations other than newsletter funds,
the term “exempt function” means the
function of influencing or attempting to
influence the selection, nomination,
election, or appointment of any individual to
any Federal, state, or local public office or
office in a political organization, or the
election of Presidential or Vice-Presidential
electors, whether or not the individual or
electors are selected, nominated, elected,
or appointed. Such term includes the
making of expenditures relating to an office
described in the preceding sentence which,
if incurred by the individual, would be an
allowable deduction as a trade or business
expense. See section 527(e) and
Regulations section 1.527-2(c).

b. For newsletter funds, the “exempt
function” consists solely of the preparation
and circulation of the newsletter.

4. Principal Campaign Committee.—A
principal campaign committee is the
political committee designated 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 and section 527(h)
of the Internal Revenue Code.

If a candidate for Congress elects to make
a designation under section 527(h), he or
she shall designate his or her principal
campaign committee by attaching a copy of
the Statement of Candidacy to Form 1120-
POL. This can be either the Federal Election
Commission Form 2, or an equivalent
statement filed with the Federal Election
Commission. This designation may also be

made by attaching a signed statement
containing the following information:

(1) the name and address of the
candidate;

(2) the candidate's taxpayer
identification number;

(3) the candidate's party affiliation and
the office sought;

(4) the district and state in which the
office is sought; and

(5) the name and address of the principal
campaign committee.
Note: This designation must be attached to
Form 1120-POL and may be made only bya
candidate for Congress. If a designation is in
effect from an earlier tax year, attach a copy
of the earlier designation to this year’s Form
1120-POL and check the appropriate box on
the form. See Regulations section 1.527-9,

If there is only one political committee
with respect to a candidate, no designation
is required. However, be sure to check the
appropriate box on page 1 of Form
1120-POL.
D. Figuring and Paying the Tax
1. Accounting

Accounting Methods.—Taxable income
must be computed using the method of
accounting regularly used in keeping the
organization’s books and records. In all
cases, the method used 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, Application
for Change in Accounting Method. Also see
Publication 538, Accounting Periods and
Methods.

Change in Accounting Period. —
Generally, before changing an accounting
period, the Commissioner's approval must
be obtained (Regulations section 1.442-1)
by filing Form 1128, Application for Change
in Accounting Period. Also see Publication
5.

2. Rounding Off to Whole-Dollar
Amounts.—The organization may show the
money items on the return and
accompanying schedules as whole-dollar
amounts. To do so, drop any amount less
than 50 cents and increase any amount
from 50 cents through 99 cents to the next
higher dollar.

3. Depositary Method of Tax
Payment.— The organization must pay the
tax due in full when the return is filed but no
later than the 15th day of the third month
after the end of the tax year.

Deposit organization income tax
payments with a Federal Tax Deposit
Coupon (Form 8109). Be sure to darken the
“1120” box on the coupon. Make these tax
deposits with either a financial institution
qualified as a depositary for Federal taxes or
the Federal Reserve bank or branch
servicing the geographic area where the
organization is located. Do not submit
deposits directly to an IRS office; otherwise,
the organization may be subject to a failure
to deposit penalty. Records of deposits will
be sent to IRS for crediting to the
organization's account. See the instructions

contained in the coupon book (Form 8109)
for more information.

To help ensure proper crediting to your
account, write your employer identification
number, “Form 1120-POL,” and the tax
period to which the deposit applies on your
check or money order.

To get more deposit coupons, use the
reorder form (Form 8109A) provided in the
coupon book.

For more information concerning
deposits, see Publication 583, Taxpayers
Starting a Business.

4. Penalties.—Avoid penalties and
interest by filing correctly 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 charged on unpaid tax at a rate
determined under section 6621.)

A political organization that fails to file its
tax return when due (including extensions
of time for filing) may be subject to a
penalty of 5% a month or fraction of a
month, up to a maximum of 25%, for each
month the return is not filed. The penalty is
imposed on the net amount due. The
minimum penalty for failure to file a tax
return within 60 days of the due date for
filing (including extensions) is the lesser of
the underpayment of tax or $100.

A political organization that fails to pay
the tax when due may be subject toa
penalty of ¥2 of 1% of the unpaid amount,
up to a maximum of 25%, for each month
or fraction of a month the tax remains
unpaid.

Overstated Tax Deposits. —If deposits
are overstated, the organization may be
subject to a penalty of 25% of the
overstated deposit claim. See section
6656(b).

Specific Instructions

Attachments.—Attach Form 4136,
Computation of Credit for Federal Tax on
Fuels, after page 1, Form 1120-POL. Attach
schedules in alphabetical order and other
forms in numerical order after the Form
4136. To assist us in processing the return,
we ask that you complete every applicable
entry space on Form 1120-POL. Please do
not write “See attached” in lieu of
completing the entry spaces.

If more space is needed on forms or
schedules, attach separate sheets to the
back of Form 1120-POL. Indicate at the top
of each attachment the form number or
schedule letter of the form or schedule
being continued. Show the information
called for in the same order as on the
printed form. Be sure to show totals on the
printed forms.

Please use sheets that are the same size
as the forms and schedules. Attach these
separate sheets after all the forms and
schedules. Also put the organization’s name
and employer identification number (EIN)
on each sheet.

Employer Identification Number.—Each
political organization (including a separate
segregated fund described in section
527(f)(3) and a newsletter fund) must use
its employer identification number.