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

Note: For information regarding filing
requirements for taxable years beginning
after 1971 and before 1975, political
organizations should see Rev. Rul. 74-21,
1974-1, C.B. 14, Rev. Rul. 74-23, 1974—
1, C.B, 17 and section 6012(a)(6).

A. Who Must File Form 1120—-POL.—

1. Effective for taxable years beginning
after 1974, 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 de-
scribed 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, see section

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 an-
other organization) for an exempt
function (defined in E below) and

(ii) have taxable income.

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

(i) the aggregate amount expended
during the taxable year for an ex-
empt 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 ex-
change of assets, over the deduc-
tions directly connected with the
production of this income.

Both of the above amounts are com-

puted by taking into account the modi-
fications 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.

(c) Ifa 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
instruction C.

For further information, see section
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
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
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) a net operating loss deduction

(section 172) is not allowed, and
(c) a deduction under part VIII of sub-
chapter B (relating to special de-
ductions for corporations) is not
allowed.

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 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.

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

E. Exempt Function.—For purposes of
section 527, the term “‘exempt func-
tion’ means the function of influencing or
attempting to influence the selection, nom-
ination, 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
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.)

If the political organiza-
tion’s main office is lo- Use this address
cated in

Now 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), Internal Revenue Service
Connecticut, Maine, Massa- | Center
chusetts, New Hampshire, 310 Lowell Street

Rhode island, Vermont Andover, Mass. 01812

Internal Revenue Service

Center
4800 Buford Highway
Chamblee, Georgia 30006

Internal Revenue Service
Center
Cincinnati, Ohio 45298

Alabama, Florida, Georgia,
Mississippi, South Carolina

Michigan, Ohio

Arkansas, Kansas, Louisiana, Internal Revenue Service
New Mexico, Oklahoma, Texas

Center
3651 S. Interregional
ighway
Austin, Texas 78740

Internal Revenue Service
enter

1160 West 1200 South
Street

Ogden, Utah 84201

Internal Revenue Service

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

Mlinois, lowa, Missouri,
Wisconsin enter
2306 E. Bannister Road

Kansas City, Missouri 64170

California, Hawaii Internal Revenue Service

enter
5045 East Butler Avenue
Fresno, California 93888

Indiana, Kentucky, North Internal Revenue Service
Caroling, Tennessee, Virginia, — Center
West Virginia 3131 Democrat Road

Memphis, Tennessee 38110

Delaware, District of Internal Revenue Service

Columbia, 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 1975 Re-
turn.—File the 1975 return for calendar
year 1975 and fiscal years beginning in
1975 and ending in 1976. If the return is
for a fiscal year, fill in the taxable year
space on the form.

I. Depositary Method of Tax Pay-
ment.—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 Federal
Tax Deposit Form 503, with an authorized

16-92886-2





commercial bank depositary or Federal
Reserve bank. Please enter the serial num-
ber of Form 503 on your remittance. Do
not remit directly to Internal Revenue.

In Schedule K, list all Form 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 deter-
mined by the date the deposit was received
by the commercial bank depositary or Fed-
eral Reserve bank.

Form 503 will be mailed to organiza-
tions on a cyclical basis depending on the
taxable year of the organization. Organiza-
tions needing Forms 503 may obtain them
from the Internal Revenue Service Center
where they will file their returns. The ap-
plication should include the organization's
name, identification number (if any), ad-
dress, and the taxable year to which the
deposits relate.

J. Change in Accounting Period.—To
change your accounting period, see section
1.442-1 of the regulations and Form
1128, Application for Change in Account-
ing Period.

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, 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 elimi-
nating any amount less than 50 cents and
increasing any amount from 50 cents
through 99 cents to the next higher dollar.

M. Attachments.—You may use attach-
ments if the lines of the form schedules
are not sufficient. Enter your name, ad-
dress and identifying number (if any) on
all attachments.

N. Signature—The return must be
signed by the president, vice president,
treasurer, assistant treasurer, chief ac-
counting officer, or any other officer (such
as tax officer) authorized to sign.

A receiver, trustee, or assignee must
sign any return he is required to file on
behalf of an organization.

O. Identifying Number.—All political or-
ganizations (including separate segre-
gated funds described in section 527(f)

(3) and newsletter funds) must use an
employer identification number. If you do
not have an employer identification num-
ber for the political organization, apply
for one from your Internal Revenue Serv-
ice Center on Form SS-4, available from
any Internal Revenue or Social Security
Administration district 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 14% 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. Estimated Tax, Minimum Tax and In-
vestment Credit—Estimated tax, mini-
mum tax and investment credit do not
apply to political organizations defined in
section 527.

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

Instructions for Schedule D

This schedule provides for the report-
ing of sales or exchanges of capital
assets. Every sale or exchange of property
must be reported even though no gain or
loss is indicated.

For reporting sales or exchanges of
property other than capital assets includ-
ing 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 memo-
randums, or similar property;

‘ US. GOVERNMENT PRINTING OFFICE : 1975—-O-568-941

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

5. certain short-term Federal, State,
and municipal obligations.
Capital Losses.—Capital losses are

allowed 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 oper-
ating loss in the taxable year to which it is
being carried.

Under the provisions of section 6411, a
quick refund of the tax overpayment cre-
ated by the capital loss carryback may be
obtained 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 appli-
cable. If Schedule D is 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.—lIf you
have a “‘net section 1201 gain” (excess of
net long-term capital gain over net short-
term capital loss), compute the tax using
the alternative method (Part IV) to deter-
mine if the resulting tax is less than the
tax computed using the regular method.
The alternative tax is the sum of:

1. a partial tax computed at the 48%
rate on the taxable income decreased by
the net section 1201 gain and

2. 30% of the net section 1201 gain.

16—82084-1


U.S. Income Tax Return
Form 1120-POL for Certain Political Organizations | 1975

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 1975 or other taxable year beginning , 1975 and ending 19
Note: If you are a section 501(c) organization and described in instruction A.3, check here p> [1].

Name of organization Employer identification number (see in-

struction O)

Number and street

2 | City or town, State and ZIP code

Enter name of candidate D>

The books are in care of > ___.
Located at >

Important—Fill in all applicable lines and schedules.

Telephone No. > __

1 Dividends (attach schedule). . . . . on
2 Interest on obligations of the United States and Us 1s. instrumentalities . 2
@ | 3 Other interest 3
SB] e Grssrens ttt
£5 Gross royalties . . . es 1)
Y| 6 (a) Net capital gains from line 9, ‘Schedule D . woe woe res £:1¢-))
§ (b) Ordinary gain or (loss) from Part Il, Form 4797 (attach Form 4797) rs 1.)
7 Other income (see instruction D.3—attach schedule)... 1 6 ee ee ew ee ee (LZ
Total income (add lines 1 through 7) . . . . - ee ee ee ee ee 8
9 Salaries and wages. 2-1 1 ee ee ee 9
10 Repairs ee ee ee | tO
AL Rents 2 6. 6 ee ee ee ee |
12 Taxes (attach schedule) . . 6 1 ee ee ee ee ee ee ee ee we |_|
Winterest
@| 14 Depreciation . . ee Le
S| 15 other deductions (attach schedule). . ss se ee 15
3 16 Total deductions (add lines 9through 15). . . . . cs - {16 _
'B | 17 Taxable income before specific deduction of $100 (line 8 less | line 16). (Section 501(c) organizations
a show: (a) amount of net investment income (line 8 less line 16) >.. + (b) aggre-
gate amount expended for an exempt function (attach schedule) p>. .., and enter
on line 17, the lesser of (a) or (b)) . - « - . .
18 Less specific deduction of $100 (not allowed for newsletter funds defined under section 527(@)) . | as
19 Taxable income (line 17 less line 18). - - . » - . + + ee ee YD
20 Total tax (from line 8 of Schedule A) . 2 6 ww ee ee ee ee ee eee | 20
21 Credits:
(a) Tax deposited with Form 7004 (attach copy) . . . . . . . se
x (b) Tax deposited with Form 7005 (attach copy) . . . . . 1 ee ee |
£ (c) Credit from regulated investment companies (attach Form 2439). . . . 21
22 Tax due (line 20 less line 21). See instruction | for depositary method of payment . . . . . |_22_
23 Overpayment (line 21 less line 20) - : --| 23

Under penalties of perjury, | declare that | have examined this return, mpanying. schedules and statements, and to the best of my knowledge and belief itis true, correct,
‘and complete. Declaration of preparer (other than taxpayer) is based on “il infection oP which the reparer hos any” knowledge.

Title

Signature of officer

Date

10—82084-2,


Form 1120-POL (1975)

Page 2

Schedule A.—Tax Computation Schedule

1

2
3
4

ONan

Taxable income (line 19, page 1) .
48% of line 1.

Income tax (line 2 or alternative tax from ‘ine 15, Schedule D ) below, whichever is is lesser) .

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

Total of lines 4(a) and (b) .

Line 3 less line 5 .

Tax from recomputing a prior year WIN credit (attach computation)
Total tax (add lines 6 and 7). Enter here and on line 20, page 1

—
—
—3_

5
—s_
a7

8

Schedule D.—Capital Gains and Losses

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

(Example, 100 shares of “2”

Kind of property and descri b, Date acquired c. Date sold

(mo., day, yr.) (mo., day, yr.)

d. Gross sales price

e. Cost or other basis

and expense of sale

f. Gain or (loss)
(d less e)

2

Unused capital loss carryover (attach computation) . 2

3 _Net short-term capital gain or (loss) . : 3
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 [4

6

Net long-term capital gain or (loss)

Summary of Schedule D Gains and Losses

7 Enter excess of net short-term capital gain (line 3) over net long-term capital loss (line 6)
8 Enter excess of net long-term capital gain (line 6) over net short-term capital loss (line 3)

9

Total of lines 7 and 8. Enter here and on line 6(a), page 1.

BE Alternative Tax Computation (See Instructions for Schedule D)

10 Taxable income (line 19, page 1) .
11 Excess of net long-term capital gain over net short term capital loss (line 8)
12 Line 10 less line 11 .
13 30% of line 11.
14 48% of line 12

15 Alternative tax (total of lines 13 and 14). If applicable, enter here and on line 3, Schedule A

10
=
a2
13
16
15

Schedule K.—Record of Form 503 Federal Tax Deposits (List Deposits in Order of Date Made—

See Instruction 1)

‘Serial number Date of

Serial number Date of
of Form 503 deposit Amount of Form 503 deposit

Amount.

Serial number
‘of Form 503

Date

deposit

of Amount

16—82084-1


Form 1120-POL (1975)

Page 3

Schedule L_—Balance Sheets

Beginning of Taxable Year

End of Taxable Year

(B) Total

() Amount (D) Total

Assets (A) Amount
1 Cash: (a) Savings and interest-bearing accounts . . .
(b) Other . oe
2 Accounts receivable net . . . soe ee ee
3 Notes receivable net (attach schedule) . woe ee ee
4 Inventories. . . soe
5 Government obligations: @ U.S. and instrumentaites
(b) State, subdivisions thereof, etc. . 2. 1 ee
6 Investments in nongovernment bonds, etc, (attach schedule) .
7 Investments in corporate stocks (attach schedule). . . ~
8 Loans:
(a) Mortgage loans (number of loans B» ______) .
(b) Other loans (attach schedule) . . . . 2 ee
9 Other investments (attach schedule) . . . . . « e
10 Depreciable (depletable) assets (attach schedule):
(a) Held for investment purposes. . 2 . ee we
(b) Less accumulated-depreciation . . . 2. . we
(c) Held for campaign purposes . . . « « we
(d) Less accumulated depreciation . . 2 1 . «
11 Land: (a) Held for investment purposes. . . 2.
(b) Held for campaign purposes. . . . ww we
12 Other assets (attach schedule). . - . se ee
13 Total assets 2. 1 1 ee ee ek
Liabilities
14 Accounts payable. 2 . we ee
15 Contributions, gifts, grants, etc. payable ee ee ee
16 Mortgages and notes payable (attach schedule) . . 2.
17 Other liabilities (attach schedule). . . . . 2 ee
18 Total liabilities. . soe ee

Net Worth (Fund Balances)
19 Principal Fund

20 Income Fund

21 Total Net Worth (Fund Balances) . . .
22 Total liabilities and Net Worth (line 18 plus tine 2) |

Schedule M.—Analysis of Changes in Net Worth

1 Total net worth at beginning of year—line 21, column B, Schedule L .
2 Enter amount from line 17, pagel. 2. . 1. 6 ee ee ee
3 Nontaxable income from contributions . . . 1. 6. ee ee
4 Nontaxable income from other sources . . . «ss s+ ee
5 Other increases not included above (itemize) >»

6 Total (add lines 1 through 5). «© - ee ee ee ee
7 Campaign expenses . 2. ee ee ee ew ee ee
8 Expenses attributable to other nontaxable income . . . . . + =
9 Other decreases not included above (itemize) >

10 Total of lines7,8and9. . . ee es . .
11 Total net worth at end of year (line 6 less ine 10)—line 21, column D, Schedule Le.

[>of [+

le x le le

10

16826841