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RFAIs > Responding to FEC Requests for Additional Information (RFAIs): Prohibited and Potential Prohibited Contributions
Applies To: Federal Election Commission
At ISPolitical, we build in tools to make it as rare as possible to get a Request for Additional Information (RFAI) from the Federal Election Commissions. However, not all RFAIs can be avoided. If you do get one about potential prohibited contributions, review the notes below for what you should do and how you can avoid getting another RFAI in the future.
See our full list of RFAI help files if you get a letter about another issue.
Contributions Made by Political Committee to PAC in Excess of Limits
Text from RFAI
Schedule B of your report discloses one or more contributions that appear to exceed the limits established by the Act (see attached). The Act precludes an individual or a political committee from making a contribution to a political action committee in excess of $5,000 per calendar year. (52 U.S.C. ? 30116(a) (formerly 2 U.S.C. ? 441a(a)) and 11 CFR 110.1(d)) If any apparently excessive contribution in question was incompletely or incorrectly disclosed, you must amend your original report with the clarifying information.
If the contribution made was excessive, you must notify the recipient and request a refund of the amount in excess of $5,000. If you have not already done so, please inform the Commission in writing of such a refund. The refund must appear on Line 15 of the Detailed Summary Page and on a supporting Schedule A of the report covering the period in which the refund is received. Although the Commission may take further legal action concerning the excessive contribution(s), your prompt action to obtain a refund of the excessive amount will be taken into consideration.
Background
Federal Election Law establishes limits that political committees may give to other political committees. You have received one or more donations that appear to exceed the legal limits.
Solution
Contact the committee to which you donated and request a refund for the excessive amount. File a Form 99 informing the FEC of what action you’ve taken and the steps you’re implementing to avoid similar mistakes in the future.
Best Practices
ISP has a series of different tools to alert you when a contribution is made in excess of limits. Using them will help ensure that you can promptly identify contributions in excess of limits and promptly reattribute or redesignate them, ensuring funds do not need to unnecessarily be returned.
Contributions Made to Candidate Committee in the Excess of Limits
Text from RFAI
Schedule B of your report discloses one or more contributions that appear to exceed the limits set forth in the Act (see attached). The Act precludes an authorized or principal campaign committee from making a contribution to a candidate for federal office in excess of $2,000 per election. (11 CFR ?? 102.12(c) and 102.13(c))If any apparently excessive contribution in question was incompletely or incorrectly disclosed, you must amend your original report with the clarifying information. If the contribution made was excessive, you must notify the recipient committee and either request a refund or redesignate (if applicable) the amount in excess of $2,000.If requesting a refund, you also must inform the Commission in writing of such a refund and provide a photocopy of any refund request sent to the recipient committee. The refund must appear on Line 15 of the Detailed Summary Page and on a supporting Schedule A of the report covering the period in which the refund is received.In regard to redesignations, you can authorize the recipient committee to redesignate the excessive portion of the contribution to another election provided the new designation does not exceed the limitations on contributions made with respect to that particular election. Also, the redesignation must be done within 60 days of the contribution being received by the recipient committee. A contribution can only be redesignated to a previous election provided the recipient committee has net debts outstanding for that election. (11 CFR ? 110.1(b)(3)(i)) If the above conditions for redesignations are not met within 60 days of receipt, the excessive amount must be refunded to your committee. See 11 CFR ? 103.3(b)(3).Although the Commission may take further legal action concerning the excessive contribution(s), your prompt action to either redesignate or obtain a refund of the excessive amount will be taken into consideration.
Background
Federal Election Law establishes limits that political committees may
give to other political committees. You have received one or more
donations that appear to exceed the legal limits.
Solution
You have two options:
1) Contact the committee you make the contribution to and notify them to redesignate some or all of your contribution to a different election. Be sure to update your data in ISPolitical to also reflect this redesignation, by entering in memo expenses.
2) Contact the committee that you made the contribution to and request a refund for the excess donation.
In either case, file a Form 99 explaining what you have done and what steps you are taking to avoid similar mistakes in the future.
Best Practices
ISP has a series of different tools to alert you when a contribution
is made in excess of limits. Using them will help ensure that you can
promptly identify contributions in excess of limits ensuring that extra
work in dealing with RFAIs and refunds is not needed.
Contributions Received from PAC in Excess of Limits
Text from RFAI
Schedule A of your report discloses one or more contributions that appear to exceed the limit set forth in the Act (see attached).
No political committee other than a qualified multi-candidate committee may make contributions to a candidate for federal office in excess of $3,300 per election. The attached PACs did not meet the requirements for qualified multi-candidate status as of the date the contribution(s) was made to your committee. The term “contribution” includes any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for federal office. (52 U.S.C. ? 30116(a) and (f) (formerly 2 U.S.C. ? 441a(a) and (f)); 11 CFR ? 110.1(b))
If any apparently excessive contribution in question was incompletely or incorrectly disclosed, you must amend your original report with the clarifying information.
If any contribution(s) you received exceeds the limits, you may have to refund the excessive amount. The funds can be retained if, within 60 days of receipt, the excessive amount is properly redesignated for a different election. An excessive contribution is considered properly redesignated if (1) the committee obtains signed written documentation from the contributor(s) authorizing the redesignation of the contribution for another election, provided that the new designation does not exceed the limitations on contributions made with respect to that election; or (2) the committee redesignates by presumption the excessive portion of the contribution for another election provided that the new designation does not exceed the limitations on contributions made with respect to that election. In this case, the treasurer must notify the contributor of the redesignation in writing within 60 days of the treasurer’s receipt of the contribution. The notification must give the contributor an opportunity to request a refund. (11 CFR ? 110.1(b)(5)(ii)(B)) A contribution can only be redesignated to a previous election to the extent that the contribution does not exceed net debts outstanding for that election. (11 CFR ? 110.1(b)(3)(i))
If you have not already done so, please inform the Commission of your corrective action immediately in writing and provide photocopies of any refund checks and/or letters redesignating the contributions in question. Refunds are reported on Line 20(a), (b), or (c), as applicable, of the Detailed Summary Page and on a supporting Schedule B of the report covering the period in which they are made. Redesignations are reported as memo entries on Schedule A of the report covering the period in which the authorization for the redesignation is received. (11 CFR ? 104.8(d)(2), (3) and (4))
Although the Commission may take further legal action concerning the acceptance of excessive contributions, your prompt action to refund or redesignate the excessive amount will be taken into consideration.
Background
Federal Election Law establishes limits that individuals and other entities may give to political committees. You have received one or more donations that appear to exceed the legal limits.
Solution
In many cases, contributions can be reattributed to a spouse or redesignated to a different election, such as from the primary to the general.
For a reattribution, you must get a signed letter from the donor and their spouse. For a redesignation, you need a signed letter from the donor. After obtaining the letter, add in the reattribution or redesignation using the hotdog menu in ISP and file an amendment or submit a Form 99 explaining that it will be reflected in the upcoming report.
If you are unable to reattribution or redesignate the funds, you must refund the excess. Use the hotdog menu to create a refunded expense and mail the donor back a check from the excessive donation. In this case, you should submit a Form 99 explaining that it will be reflected in the upcoming report.
Best Practices
ISP has a series of different tools to alert you when a contribution in excess of limits. Using them will help ensure that you can promptly identify contributions in excess of limits and promptly reallocate or redesignate them, ensuring funds do not need to unnecessarily be returned.
Corporation conduit for contributions
Text from RFAI
Schedule A of your report indicates that one or more corporations acted as a conduit for contributions earmarked to your committee. Corporations are prohibited from making contributions to nonconnected committees, unless made from a separate segregated fund established by the corporation. Any entity that is prohibited from making contributions in connection with a federal election may not act as a conduit for contributions earmarked to a nonconnected committee. (11 CFR ? 110.6) If any apparently prohibited contribution in question was incompletely or incorrectly disclosed, you must amend your original report with the clarifying information. In addition, please clarify whether the contribution(s) received from the reference organization(s) is permissible.To the extent that your committee has received prohibited funds, you may have to make a refund. If within 30 days of receipt you (1) transferred the prohibited amount to an account not used to influence federal elections, and (2) provided written notice to the person making the contribution of the option of receiving a refund, you may retain the contribution in an account not used to influence federal elections. Any request from a donor for a refund must be honored.If the foregoing conditions for transfers to a non-federal account were not met within 30 days of receipt, the prohibited amount must be refunded. (11 CFR ?103.3(b)(1))Please inform the Commission of your corrective action promptly in writing and provide a photocopy of your check for any transfer-out or refund. Should you choose to transfer-out or refund the contribution(s), the Commission will presume the funds were impermissible if no statement from your committee provides information to the contrary. Transfers-out and refunds should be disclosed on a Schedule B supporting Line 22 or 28 of the report covering the period during which the transaction was made.Although the Commission may take further legal action concerning the acceptance of prohibited contributions, prompt action by your committee in transferring-out or refunding the amounts will be taken into consideration.- Your report discloses certain categories of financial activity that have been reflected on the wrong lines of the Detailed Summary Page. For your information and consideration when preparing future filings, Contributions from other political committees should be properly disclosed on a separate Schedule(s) A, supporting Line(s) 11(c) of the Detailed Summary Page. Please refer to the instructions for each line when determining the proper categorization(s) for your next filing. (52 U.S.C. ?30104(b) and FORM 3X Instructions)
Background
You have reported a contribution through a conduit but have failed to report the FEC ID number for the conduit.
Solution
This error could be caused by two different root causes.
Either:
1) A missing FEC ID number on the conduits organization record.
2) Incorrectly reporting contributions processed through a commercial entity as through a conduit.
If this was actually a donation through a conduit committee, update the organization record in ISP to enter in the ID Number in the political committee section.
If this was actually a donation through a commercial credit card processor, it should not be reported as a conduit contribution. Enter the contributions as directly from the donors and do not report the processor as a conduit.
In either case, after updating your data, file an amendment report with a note explaining what you have done.
Best Practices
ISPolitical has multiple tools to help you avoid issues like these.
First, rather than manually entering in political committees, use the “Add for the FEC” tool. This will automatically bring in all necessary information, including the FEC ID number.
Second, ISP has multilayered alerting for potentially prohibited contributions: when adding transactions, on the dashboard, and via automated emails. Be sure to carefully review and address any issues identified.
Finally, every time you generate a compliance report, automated error checking will alert you of potential problems. Reviewing and addressing these issues will help resolve problems before you file.
Potentially Prohibited Contribution from limited liability corporation
Text from RFAI
Schedule A of your report discloses one or more contributions that appear to be from a limited liability corporation(s) (LLC) (see attached). 11 C.F.R. ?110.1(g) allows the receipt of contributions from LLCs providing the LLC is treated as a partnership for tax purposes, and has not elected to be treated as a corporation by the Internal Revenue Service (IRS). Both LLCs that claim corporate status and those that are publicly traded would be treated as corporations for FECA purposes.
Please amend your report to clarify if the LLCs in question are treated as partnerships. If any apparently prohibited contribution in question was incompletely or incorrectly disclosed, you must amend your original report with clarifying information. 52 U.S.C. ? 30116(f) prohibits a candidate for federal office from accepting contributions from a person in excess of $3,300 per election. A partnership is included in the definition of “person” under 52 U.S.C. ? 30101(11) (formerly 2 U.S.C. ?431(11)).
If you have received prohibited contributions, you must make a refund. (11 CFR ? 103.3(b)(1)) The refund must be made within 30 days of the treasurer becoming aware of the illegality of the contribution. (11 CFR ? 103.3(b)(2))
If you have not already done so, please inform the Commission of your corrective action immediately in writing and provide a photocopy of any refund checks. Refunds must be reported on a Schedule B supporting Line 20(a) of the report covering the period in which the refund was made. (11 CFR ? 104.8(d)(4))
Although the Commission may take further legal action concerning the acceptance of prohibited contributions, your prompt action to refund the prohibited amount will be taken into consideration.
Background
Federal Election Law allows contributions from some but not all limited liability corporations. For contributions to be legal, the LLC is treated as a partnership for taxation purposes and the donations must be allocated to the members.
Solution
If the contribution is from a prohibited LLC, issue a refund (refunded contribution) and file a Form 99 specifying what you’ve done.
If the contribution is for an allowed LLC, add in the allocations to each partner as a split and file an amendment. When filing your amendment, include a note explaining what you have done.
Best Practices
ISPolitical automatically alerts you to contributions received from LLCs that do not have the necessary allocations specified.
To avoid future RFAIs, be sure to carefully review and address all errors and warnings displayed when generating your compliance report.
Prohibited Contribution Received from Labor Organization
Text from RFAI
Schedule A of your report discloses one or more contributions that appear to be from a labor organization(s) (see attached). 52 U.S.C. ? 30118(a) (formerly 2 U.S.C. ? 441b(a)) and 11 CFR ? 103.3(b) prohibit the receipt of contributions from corporations and labor organizations unless made from separate segregated funds established by the corporations and labor organizations. The Commission notes your additional explanation regarding the committee’s corrective action taken for all of these contributions.
If any apparently prohibited contribution in question was incompletely or incorrectly disclosed, you must amend your original report with clarifying information.
If you have received prohibited contributions, you must make a refund within 30 days of the treasurer becoming aware of the illegality of the contribution. (11 CFR ? 103.3(b)(1) and (2))
If you have not already done so, please inform the Commission of your corrective action immediately in writing and provide a photocopy of any refund checks. Refunds must be reported on a Schedule B supporting Line 20(a) of the report covering the period in which the refund is made. (11 CFR ? 104.8(d)(4))
Although the Commission may take further legal action concerning the acceptance of prohibited contributions, your prompt action to refund the prohibited amount will be taken into consideration.
Background
Federal law heavily restricts non-individual political donations, generally banning direct contributions from corporations and labor unions. However, donations from PACs associated with corporations and labor unions are legal and common.
You appear to have received an illegal donation.
Solution
If the donation was received directly from a labor union, it needs to be returned.
Issue a refund (refunded contribution) and file a form 99 explaining what you’ve done.
If the donation was received from the union’s PAC, then correct the entity record in your system, including adding in the Political Committee’s FEC ID number. Then file an amendment.
Best Practices
ISPolitical has a multi-tiered model to help you avoid these mistakes:
1) ISPolitical provides easy access to the full FEC directory of political organizations. Using the “Add from FEC” feature allowing you to enter in full names, address, FEC ID numbers, and more.
2) ISP has a series of different tools to alert you when a contribution is made in excess of limits. Using them will help catch when a contribution may be prohibited or entered incorrectly.
Schedule A of your report discloses one or more contributions that appear to be from a limited liability company(ies) (LLC) (see attached).
Text from RFAI
Schedule A of your report discloses one or more contributions that appear to be from a limited liability company(ies) (LLC) (see attached). 11 C.F.R. ?110.1(g) allows the receipt of contributions from LLCs providing the LLC is treated as a partnership for tax purposes, and has not elected to be treated as a corporation by the Internal Revenue Service (IRS). Both LLCs that claim corporate status and those that are publicly traded would be treated as corporations for FECA purposes.
Please amend your report to clarify if the LLCs in question are treated as partnerships. If any apparently prohibited contribution in question was incompletely or incorrectly disclosed, you must amend your original report with clarifying information. 52 U.S.C. ? 30116(f) prohibits a candidate for federal office from accepting contributions from a person in excess of $3,300 per election. A partnership is included in the definition of “person” under 52 U.S.C. ? 30101(11).
The Commission has approved the use of the following sample donor response form for committees that seek and accept contributions from LLCs to affirm to the recipient committee that the LLC is eligible to make the contribution and to satisfy the “best efforts” obligation to obtain contributor information: https://www.fec.gov/resources/cms-content/documents/mtgdoc-24-53-A.pdf. If you have received prohibited contributions, you must make a refund. (11 CFR ? 103.3(b)(1)) The refund must be made within 30 days of the treasurer becoming aware of the illegality of the contribution. (11 CFR ? 103.3(b)(2))
Please inform the Commission of your corrective action promptly by filing an amended report or Miscellaneous Document (Form 99 for electronic filers). If a remedy will be disclosed in a future reporting period, please provide the date and amount of the remedy in your response. The committee should retain records of refunds of the contributions in question. Refunds must be reported on a Schedule B supporting Line 20(a) of the report covering the period in which the refund was made. (11 CFR ? 104.8(d)(4))
Although the Commission may take further legal action concerning the acceptance of prohibited contributions, your prompt action to refund the prohibited amount will be taken into consideration.
Background
Federal Election Law allows contributions from some but not all
limited liability companies. For contributions to be legal, the LLC
is treated as a partnership for taxation purposes and the donations must
be allocated to the members.
Solution
If the contribution is from a prohibited LLC, issue a refund
(refunded contribution) and file a Form 99 specifying what you’ve done.
If
the contribution is for an allowed LLC, add in the allocations to each
partner as a split and file an amendment. When filing your amendment,
include a note explaining what you have done.
Best Practices
ISPolitical automatically alerts you to contributions received from LLCs that do not have the necessary allocations specified.
To
avoid future RFAIs, be sure to carefully review and address all errors
and warnings displayed when generating your compliance report.
