[EL] IRS statement on c4s

[John Pomeranz]

Until this recent evidence of enforcement, the general perception has
been that the IRS hasn't been attempting to impose gift tax liability on
these types of gifts to tax-exempt organizations.  Those of us who
advise such groups and their donors have been aware of the issue and the
possible defenses that could be raised against a claim of gift tax
liability for some time. 

Whether or not the recent examinations are part of a broader effort, I
think it quite likely that the evidence of IRS enforcement and the
attention paid to those efforts will factor into the thinking of both
the contributors and the organizations seeking to receive those funds.
I also expect that we will see some court rulings that clarify the
degree to which gift tax is due for contributions to 501(c)(4)s and
501(c)(6)s (although it's unlikely that we'll get clear guidance from
the courts before the 2012 election).

John Pomeranz
Harmon, Curran, Spielberg & Eisenberg, LLP
1726 M Street, NW, Suite 600
Washington, DC  20036
p: 202.328.3500
f: 202.328.6918
e: jpomeranz at harmoncurran.com 



-----Original Message-----
From: law-election-bounces at department-lists.uci.edu
[mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Ben
Smith
Sent: Thursday, May 12, 2011 8:00 PM
To: law-election at uci.edu
Subject: [EL] IRS statement on c4s

So they say the c4 inquiries were led by civil servants and -"are not
part of a broader effort looking at donations to 501(c)4s."

Do people think this will, nevertheless, wind up impacting political
giving, or not?

Here's the full statement:
http://www.politico.com/blogs/bensmith/0511/IRS_c4_inquiries_not_politic
al.html?showall

The IRS has opened examinations of five donors who had not filed gift
tax returns to determine if the donation were taxable gifts and if a
gift tax return should have been filed. These examinations were
started by employees of the Estate and Gift Tax Unit at the IRS as
part of their increased efforts in the area of non-filing of gift and
estate tax returns. These examinations are not part of a broader
effort looking at donations to 501(c)4s. All of the decisions
involving these cases were made by career civil servants without any
influence from anyone outside the IRS.
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