LAWREVIEW
New State PAC Law’s Impact
on Associations
This Law Review was written by
guest author Randall F. Witter,
CAE, the Association Forum’s
lobbyist in Springfield, and was
edited by Jed R. Mandel, founding member of Chicago Law
Partners, LLC. CLP serves as
the Association Forum’s general
counsel.
Q: How will the new PAC law impact
associations?
A: In case you are not aware, a new act
(Public Act 96-832, previously Senate Bill
1466) amending the Election Code in
Illinois was passed and signed into law
by Gov. Quinn on Dec. 9, 2009. Many
of the act’s provisions will go into effect
on Jan. 1, 2011. As the act may impact
the administration of certain political
action committees (PACs), PAC managers should take steps to review the act in
order to determine the impact of the new
legislation on their organizations.
The change that will impact the great-
est number of Illinois PACs is an amend-
ment to Section 9-2 regarding the name
of the PAC. Section 9-2 of the amended
act requires that the name of all PACs
include the name of the entity forming
the PAC. Accordingly, as of Jan. 1, 2011,
unless the exact name of the entity form-
ing the PAC currently is included in the
PAC’s name on file with the State Board
of Elections, the PAC must take all steps
necessary to change its name and file
an amended form with the Illinois State
Board of Elections prior to Jan. 1, 2011,
in order to be in compliance with the
requirements of the new law. For exam-
ple, if the Illinois Association of Widgets
has a PAC currently named the “Widgets
Political Action Committee,” it will be
required under the new law to change its
name and re-file with the State Board of
Elections as the “Illinois Association of
Widgets Political Action Committee.”
Beware! If your PAC is required (under
Section 527 of the Federal Internal Rev-
enue Service Code) to file a Form 8871,
changing the name of your PAC in com-
pliance with the new Illinois law also will
require that the PAC file an amended
Form 8871 with the IRS within 30 days
of the name change. Accordingly, the
new Illinois law may trip the require-
ment for many Illinois association PACs
to file an amendment to their Form 8871
federal filing. And, just to show you how
unintentionally complicated things can
get, it may be more difficult than you
might think to amend the Form 8871 filing. That’s because the IRS requires all
changes to the Form 8871 be made electronically. However, to make the change
electronically, the organization likely will
require a new user ID and password and,
Catch- 22 alert, the IRS will not issue a
new user ID or password on an expedited
basis to meet the 30-day compliance
deadline.
PAC managers should
familiarize themselves
with the new requirements
of the Illinois law and double
check their responsibilities
under the federal law.
the Federal Election Commission as a
political committee;
• Committees of state or local candidates;
• State or local committees of a political
party; and
• Any organization reasonably anticipat-
ing that it always will have less than
$25,000 for any taxable year.
Thus, Illinois PACs with income of
$25,000 or more must file Form 8871.
PAC managers should familiarize themselves with the new requirements of the
Illinois law and double check their
responsibilities under the federal law.
Seek advice from your legal and accounting professionals. Don’t hesitate to call
the State Board of Elections or the Internal Revenue Service if you have questions.
As a refresher, Section 527 of the Federal Internal Revenue Service Code sets
forth which organizations are required to
file Form 8871. Adopted in 2002, Section
527 basically requires all political organizations to file Form 8871, with the exception of the following:
• Any organization required to report to
The answers provided here should not be construed as legal advice or a legal opinion. Consult a
lawyer concerning your specific situation or legal
questions.
