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Data Snacks: Parties, PACs and non-profits, oh my (and lawsuits)

Are you confused about political groups? Politics are governed by campaign finance laws. Here’s what the IRS says: A political organization subject to section 527 is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.

There are state campaign finance laws too. Those are covered by Title 16, Chapter 6 of the Arizona Revised Statute (A.R.S.).

LD3 Democrats is a state Political Party Committee. We promote nominees of the Democratic Party and treat all Party candidates equally and fairly until the primary election when the nominees are selected by voters. We support Democratic candidates for non-partisan Council and School Board contests but cannot coordinate directly with those campaigns.

Political Action Committees, PACs, can be formed around almost any cause and at every level of government. A non-expert trying to define PACs is bound to get something wrong. There are Connected PACs, non-connected PACs, Hybrid PACs, Leadership PACs, Super PACs and even pop-up PACS. PACs are tied to causes – the Action – not necessarily Party. The largest state PAC in Arizona is Realtors of AZ PAC (RAPAC). They promote candidates of either party who will help realtors. You can guess their investments are pretty lopsided.

PACs are formed at the level where they operate. Federal, State and even townships. Fountain Hills has a PAC that is only registered in the town. Aptly named ROT (possibly to explain what they stand for), they spent money name-calling and making cartoon characters out of Democratic candidates. ROT doesn’t seem to have any actual issues.

PACs can promote a candidate before the primary election. Although they can promote Independents and non-partisan candidates, they may be constrained by the state party if they contract for the use of party tools like voter lists.

501s. Some political organizations incorporate as non-profits under IRS tax code 501(c). When 501(c) groups engage in “public policy advocacy”, they can be subject to IRS 527. Most political groups incorporate under 501(c)4, social welfare groups in the same category as country clubs. Many Indivisible groups are in this category as is the MAGA group Turning Point USA. There are a handful of political groups set up as 501(c)3s, true charities. A target of the anti-Dark Money legislation we (finally) passed in 2022 was to require 501s to disclose their donors as Political Committees do.

Lastly, Unincorporated Nonprofit Association (UNA or UNPA). LegalZoom, which is in the business of selling incorporation, calls these “just an association of people”. UNA’s cannot contract. The individuals involved accept all liabilities personally. Political UNAs are not exempt from IRS 527.

There doesn’t appear to be any one concise guidebook to these complex rules. You can find good information scattered throughout the Clean Elections Commission website. Another source is the handout for candidates provided by the Secretary of State. It hasn’t been updated yet for 2024.

Learn more about where your favorite organization gets their income and how they spend it at and

I am not an attorney.

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