[EL] "I.R.S. Begins Enforcing Rule on Gifts toPolitical Nonprofits"

[Trevor Potter]

$13,000

________________________________

From: law-election-bounces at department-lists.uci.edu on behalf of Jim Lacy
Sent: Fri 5/13/2011 8:59 PM
To: jon.roland at constitution.org
Cc: law-election at department-lists.uci.edu
Subject: Re: [EL] "I.R.S. Begins Enforcing Rule on Gifts toPolitical Nonprofits"


No one should be too alarmed.  The gift tax only applies to gifts of $10,000 or more and as I have stated earlier, contributions from businesses to nonprofits that have an affinity to increase employment or help a sector are not only exempt from the tax, they could qualify for a deduction under Section 162.  Business owners can shift their donations from personal to thru their businesses and get out of tax exposure.  Even get a deduction.  The only contributors this really affects are very big donors who are do-gooder liberal types that are trying to express some sort of philanthropic ideal thru a group that is really advocating policy.  They will definitely be affected and should pay the gift tax.

James V. Lacy 
Sent from my iPhone
Confidentiality applies

On May 13, 2011, at 4:33 PM, Jon Roland <jon.roland at constitution.org> wrote:



	Reports I am getting from many nonprofit managers that rely on donations presents an alarming picture of donors, reacting to the news reports, suspending donations of all kinds, even to gift-tax-exempt recipients, pending word from their lawyers, and some are just abandoning donations to be on the safe side. It is even affecting 501(c)(3) and 501(c)(19) veterans organizations, as well as 527s. Most donors have just assumed that donations to nonprofits were all gift-tax-exempt, and are now scared of any gift non-reporting triggering a general audit of all their activities, even if it falls under the $13,000.00 annual exclusion. It is the reporting requirement that bothers them, not the money.
	
	Some of the recipients being affected include:
	508 churches
	Scholarships, fellowships, and research grants to individuals (despite the educational exemption)
	Grants to support public-interest litigation
	Grants to support public-interest political reforms that have no business rationale
	Grants to feed, house, and job-train poor and homeless that don't go through a 501(c)(3)
	Donations to informal state and local non-electoral political campaigns, such as for public testimony on legislation
	
	There is a huge nonprofit sector that is not involved in electoral politics (and so arguably off-topic for this listserv), but as long as we are addressing the topic, we might as well consider all the impacts, because they may ultimately affect election legislation.
	
	
	On 05/13/2011 12:50 PM, James Lacy wrote: 

		this recent IRS action only potentially affects INDIVIDUAL gifts to nonprofits



	-- Jon
	
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