Nothing in 527 requires a political organization to be incorporated.  Section 527(e) specifically indicates that a political organization is a "party, committee, association, fund, or other organization (whether or not incorporated) . . .

So an unincorporated association would still be a political organization under Section 527 and would only be taxed on its exempt function income.  Moreover, section 2501(a)(5) of the Code (I.R.C.) exempts contributions to political organizations, as defined by 527(e) from gift tax.

So both the organization and Soros are off the hook.

In any event, there is dispute among tax people whether a 527 could actually be subject to tax on donations even absent the code provision.

Donald Tobin
Moritz College of Law
Assistant Professor
tobin.46@osu.edu

Donald B. Tobin
Assistant Professor of Law
The Ohio State University
Michael E. Moritz College of Law
55 West 12th Avenue
Columbus, OH  43210
Phone: (614) 688-3539