	Background

In July 2000, P.L. IRS Disclosed Data Filed by Section 527 Organizations, but the Data Are Not Readily Accessible to Support Public Users

According to IRS officials, IRS has disclosed on its Section 527 Web site all  data reported on Forms 8871 and 8872. However, this Web site falls short  of disclosing data to the public in an accessible manner because the site is  difficult to use and lacks electronically searchable and downloadable data. IRS Provides Limited Oversight to Ensure that Section 527 Organizations Meet Filing Requirements

IRS’s oversight of Section 527 organizations’ compliance with the law’s  filing and reporting requirements has been very limited and has included  checks on whether some of the reported data is correct and little proactive  effort to determine whether all filings are timely and all organizations that  should file have done so. 106-230’s  requirements. These organizations are to  annually file Forms 990 to list their activities, income, and expenses— including those for political activities. 106-230 and on  publicly disclosing the data. IRS Planning for New Responsibilities Not Adhering to Accepted Principles

IRS has not developed a strategic plan to carry out its Section 527  responsibilities. For example, this IRS plan focuses on activities,  such as audits, for all types of tax-exempt organizations. 106-230, we recommend  that the Commissioner of Internal Revenue develop results-oriented plans,  including timeframes and resources needed, for  improving the usability of the disclosure Web site after consulting with  the full range of users of the data;    overseeing whether Section 527 organizations fulfill their filing  requirements; and  increasing the availability of electronic data on Section 527 organizations  to improve the public accessibility of disclosed data as well as to support  IRS’s oversight efforts. Such organizations have sponsored  advertisements that support or oppose a candidate’s position on an issue  without expressly advocating the election or defeat of that candidate. IRS officials said that P.L.
Why GAO Did This Study

Tax-exempt organizations seeking to influence political elections--called Section 527 organizations--are estimated to spend millions of dollars annually in federal elections. These organizations use unregulated "soft money" for issue advocacy, such as sponsoring an advertisement that supports or opposes a candidate's position on an issue. Although all states require these groups to publicly release data on their finances and activities, no central source for such data exists. In July 2000, Congress passed legislation requiring Section 527 organizations to provide data on their purposes, officers, contributors, and expenses to the Internal Revenue Service (IRS) for public disclosure.

What GAO Found

IRS has established a website for this purpose, but GAO found that the website is difficult to use, and most of the disclosed data are not electronically searchable and downloadable--which can inhibit timely analysis of the relationship between political organizations and the influence of soft money on federal campaigns. IRS has done little to oversee Section 527 organizations' compliance with the law's filing and reporting requirements. As a result, IRS can provide four assurances that the data it disclosed on its website are timely, complete, and correct. IRS officials said that oversight has been limited because of (1) competing demands for resources, (2) the focus on educating Section 527 organizations and on publicly disclosing the data, and (3) having the lack of electronic data on Section 527 organizations. IRS has not developed a strategic plan to ensure that the law's requirements are met.