What is the tax status of unexpended balances of political funds refunded to contributors?
A. For tax purposes, unexpended balances of political funds which are repaid to known contributors are not considered to be either expended or diverted; therefore, the unexpended balances are not taxable income to the candidate. Unexpended balances of political funds may be contributed to or for the use of another political organization, transferred to the general fund of the U.S. Treasury or of any state or local government, or transferred to or for the use of an exempt public charity, without being considered to be expended or diverted and, therefore, are not taxable to the candidate. Q. What reporting is required of a political committee, organization, association or fund formed for the purpose of managing campaign contributions and expenses of a candidate? A. Such an entity, whether or not it is tax exempt, is considered an association taxable as a corporation and must annually file Form 1120-POL if it has any political organization taxable income. Political organization taxable in
