Outlined below are special rules concerning contributions from partnerships to party committees.

 

Contributions Made by Partnership

A partnership may make contributions aggregating up to $10,000 per calendar year to the state, district or local party committees of a particular state party and up to $25,000 to a national party committee. In addition, a contribution from a partnership counts proportionately against each participating partner’s own limit with respect to the same committee.[1] 110.1(c) and (e).

Contributions Made by
Individual Partners

Each partner may make contributions aggregating up to $10,000 per calendar year to a party committee. 110.1(c). Although contributions made by the partnership as a whole count proportionately against each participating partner’s $10,000 limit, contributions made by individual partners from their own funds do not count against the partnership’s limit. 110.1(e).

Limited Liability Companies

In some cases, limited liability companies (LLCs) are treated as partnerships. For the purposes of contribution limitations and prohibitions, an LLC is treated as a partnership if:

·       It does not have publicly traded shares; and

·       It has chosen to file, under IRS rules, as a partnership; or

·       It has made no choice, under IRS rules, as to whether it is a corporation or a partnership. 110.1(g)(2) and (3)

Under these conditions, this appendix would apply to those LLCs.

Formula

A portion of the partnership contribution must be attributed to each contributing partner. If all partners within the organization are contributing, the partnership may attribute the contribution according to each partner’s share of the firm’s profits. However, if the partnership attributes a contribution on another basis agreed to by the partners, or if it attributes contributions only to certain partners, the following rules must be observed:

• The contributing partners’ profits must be reduced (or their losses increased) by the amount of the contribution attributed to them; and

• The profits (or losses) of only the contributing partners must be affected.

The portion attributed to each partner must not exceed the individual partner’s contribution limit. 110.1(e). See also “Partnerships with Corporate Members,” below.

Notice to Recipient Committee

Because a contribution from a partnership is a joint contribution, the partnership must provide to the recipient committee, along with the contribution, a written notice listing the names of the contributing partners and the amount to be attributed to each. However, unlike other joint contributions, the signature of each contributing partner is not required. 110.1(k)(1).

Partnerships with Corporate Members

Because contributions from corporations are prohibited, a partnership with corporate members may not attribute any portion of a contribution to the corporate partners. 110.1(e) and 114.2(b). A partnership composed solely of corporate partners may not make any contributions. AO 1981-56.

Partnerships with Foreign National Members

Because contributions from foreign nationals are prohibited, a partnership may not attribute any portion of a contribution to a partner who is a foreign national. 110.20. (See here for further information on the foreign national prohibition.)

Partnerships with Federal Government Contracts

A partnership which is negotiating a contract with the federal government or which has not completed performance of such a contract is prohibited from making contributions. However, an individual partner in such a firm may make contributions from personal funds (rather than from funds drawn on the partnership’s account). 115.4. See also AO 1991-1.

Also, an individual partner who is a federal contractor may not make contributions using any funds (business or personal) under his control. 115.5.

Although law firms, doctors’ practices and similar groups are often organized as partnerships, some of these groups may instead be professional corporations. Unlike a partnership, a professional corporation is prohibited from making any contributions because contributions from corporations are unlawful. 114.2(b).

Included in Total Figure

Partnership contributions are included in the total figure reported for “contributions from individuals/persons other than political committees” on the Detailed Summary Page of Form 3X.

Itemization

If a partnership contribution exceeds $200 or aggregates over $200 during a calendar year, the committee must itemize the contribution on a Schedule A used for “Contributions from Individuals/Persons Other Than Political Committees” (Line 11a(i)).

Additionally, if an individual partner’s share of the contribution exceeds $200 when combined with other contributions received from that partner in the same calendar year, the committee must disclose, as a memo entry, itemized information on the partner (name, address, occupation, date contribution received, partner’s share of contribution and aggregate year-to-date total of contributions made by that partner). 104.8 and 110.1(e).

In-Kind Contributions

A committee reports the value of an in-kind contribution from a partnership in the same way it reports a monetary contribution. In addition, as with all in-kind contributions, the committee must report the value of the in-kind contribution as an operating expenditure. Moreover, an in-kind contribution itemized on Schedule A must also be itemized on a Schedule B for operating expenditures. 104.13 and 110.1(e). (See here.) However, any information about a partner itemized as a memo entry on Schedule A does not have to be reported on Schedule B.

In several advisory opinions (AOs), the Commission has said that a partnership may set up an internal plan to facilitate contributions from individual partners or the partnership as a whole to candidates or political committees (other than a nonconnected committee sponsored by the firm—see below). Incidental expenses incurred to administer such plans do not trigger a requirement, on the part of the firm, to register as a political committee. See AOs 1984-18, 1982-13, 1981-50 and 1980-72 for more information.

A partnership may form its own political committee (a nonconnected committee) which, in turn, may make contributions to a party committee, subject to the $10,000 or $25,000 per year limit. In this case, any administrative and solicitation costs paid by the partnership on behalf of its committee count as in-kind contributions to the committee. For more information on PACs sponsored by partnerships, see the Campaign Guide for Nonconnected Political Committees.