Tax Treatment of Organization that No Longer Meets Section 527 Operational Test
An organization whose section 527 political activities decrease so that its political activity is not its primary activity may not be exempt under section 527. Such organizations are no longer required to file Form 8871 or Form 8872. The organization may be a non-exempt entity required to file income tax returns. If the organization is exempt under section 501(a), however, it may be required to file Form 1120-POL or Form 990 as an exempt organization. See Life Cycle of an Exempt Organization and Tax Information for Other Non-Profits for more information on requirements for exemption under section 501(a).