Filing Date on Democratic 527’s IRS Report Is Five Weeks After Deadline

If filed late, fines could go as high as $4.4 million

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• March 14, 2018 5:00 am


The Democratic Legislative Campaign Committee, a "527" group that supports Democrats running for state legislative office, appears to have missed a key IRS deadline to file a report showing contributions and expenditures, although a representative of the committee disputes they were late.

The DLCC was required to file their year-end report of finances on Jan. 31, but the report available to download online from the IRS shows a filing date of March 7.

The DLCC said a glitch was responsible for the suggestion that the group filed late.

"We turned in our Form 8872 on Jan. 31 to the IRS," the DLCC's Mara Sloan told the Washington Free Beacon by email. "Due to the size of the file (over 3.5 mb), we were told by the IRS that they were unable to post it publicly due to a glitch on their end that also affected other organizations as well. Given the increase in individual small donors to the DLCC in the last two quarters of 2017, we filed the longest report ever in our history. Yesterday [March 7] was the first time they were able to publicly post the large file."

"Also worth noting that the form automatically populates the date, making it appear like it was filed later than it actually was," Sloan concluded.

Missing the deadline could come with stiff penalties.

"The penalty [for a 527 failing to file this disclosure on time] is 35% of the total amount of contributions and expenditures to which a failure relates," according to an IRS document.

In this particular instance, the total contributions and expenditures reported by the DLCC's report was about $12.5 million, so a 35 percent fine on that total would be just shy of $4.4 million.

The DLCC did not respond to follow-up requests to supply any documentary evidence that the IRS had received the financial disclosure anytime before the deadline. The DLCC also did not explain why the .pdf of their disclosure on the IRS's site is only 1.8MB in size as opposed to the 3.5MB they said.

Numerous requests for comment to the IRS were not returned.

If a fine were warranted, the 35 percent mechanism represents the upper limit, so the fine could be less.

"While the IRS has the legal authority to impose a 35 percent penalty, it also has some discretion in determining what penalty to impose and may waive a penalty in some cases," said Kendra Arnold, director of the watchdog group Foundation for Accountability and Civic Trust. "I'm not familiar with the particular facts of this case, but whether the penalty was assessed may depend on whether the IRS finds there was willful neglect to not timely file."

If the report is indeed the "longest report ever" in DLCC history as Sloan suggests, part of that may be due to unnecessary extra entries that were not required. According to IRS rules, the only contributions that need to be itemized are those of $200 or more. However, the report filed by the DLCC listed thousands of donors who gave less than $200, some contributors donating as little as $1 or $3. An analysis by the Washington Free Beacon estimates that as much as 85 percent or more of the contributions listed in the DLCC report were under $200, and therefore could have been avoided as an itemized listing.

The DLCC has been one of several areas of importance for Democrats in the upcoming 2018 midterms. After the 2016 elections, Republicans controlled "4,170 state legislative seats after last week's elections, while Democrats will control 3,129 seats in the nation's 98 partisan legislative chambers," according to the Hill.

The full 1.8 mb filing from the DLCC can be read here.

Published under: Democrats, IRS