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Wednesday, June 15, 2011

GOP Demands Answers From IRS on Gift Tax Probe of 501(c)(4) Groups

House Ways & Means Committee Chair Dave Camp today released a letter he sent to the IRS demanding information about its recent investigation on the possible application of the gift tax to 501(c)(4) groups:

Camp questioned the process leading up to this action and level of involvement by the Obama Administration. ... “Every aspect of this tax investigation, from the timing to the sudden reversal of nearly thirty years of IRS practice, strongly suggests that the IRS is targeting constitutionally-protected political speech.  The IRS must explain its actions or risk creating a chilling effect that threatens not only political advocacy groups, but all tax-exempt organizations that depend on contributions from individual donors.”

Prior TaxProf Blog coverage:

http://taxprof.typepad.com/taxprof_blog/2011/06/gop-demands.html

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Comments

Come on Camp...get with the program. Senate Finance asked for the stuff a month ago. Just since the agency hasn't enforced from administering the law (which W&M and Sen Fin was likely responsible for reviewing/enacting), doesn't change the fact (i) that the Hill folks are trying to protect their own, (ii) non-enforcement of a law doesn't stop an executive branch agency from beginning to do it, and (iii) they should just shut up and fix it legislatively (and retroactively of course).

Beating up the IRS for challenges of Congress (and their allies) was one of the main reasons for the creation of the National Treasury Employees Union (NTEU) - and we have seen how well unionized federal employees have worked out - they should just stick with their pettiness re: debt limit and let the IRS be.

Posted by: Prof D | Jun 15, 2011 5:33:41 PM

The continued pressure by the GOP must mean that they think donations to 501(C)(4) groups are subject to the gift tax. Otherwise they would just let it go.

Posted by: Sid (real one) | Jun 15, 2011 6:54:57 PM