[EL] Constitutionality of applying gift tax to c4 constributions

[Paul Lehto]

On 5/11/11, DONALD TOBIN <tobin.46 at osu.edu> wrote:
> In addition, I find it somewhat ironic that (c)(4)s and other corporations
> want the benefits of person hood, but now complain when they are being
> treated as an entity or person for tax purposes.

If a natural person (not a c4 or corporation) receives gifts or
donations that are made with the intent of supporting the present and
future continued political activism of that natural person these gifts
or donations enhance First Amendment political speech like supporting
a political ad campaign does.  Nevertheless, these donations are
treated as taxable INCOME by the IRS, not as gifts potentially subject
to the gift tax, mainly because of the intent to support ongoing work or
effort.  I believe this correct, but if a tax expert wants to chime in....

If corporations and persons are to be equal at this level, the issue
is not just gift tax (with its large lifetime exemptions) payable by
donors, but income tax payable by the corporation or "person"
receiving the donation - if the donation comes with the expectation
that it will be used to further the political work or cause.

On the other hand, a true no-strings-attached gift to a political
activist is just that - a gift.  Nevertheless, for the donor, gift tax
would be triggered at the appropriate threshold.


-- 
Paul R Lehto, J.D.
P.O. Box 1
Ishpeming, MI  49849
lehto.paul at gmail.com
906-204-4026 (cell)