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Congressional codification of section 527 in 1975 largely reflected the IRS’s treatment of political organizations at the time, including that contribution income was not taxable income, and did not provide a significant tax subsidy. In 2000, Congress amended section 527 to impose reporting obligations and, simultaneously, made section 527 voluntary, thus reviving pre–1975 law. The lack of a significant subsidy undermines the effectiveness of imposing burdens on section 527 organizations where there is a choice of tax treatment. The lack of a significant subsidy also raises the constitutional bar to imposing any burdens on section 527 organizations.

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