TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, December 2, 2015

The IRS Scandal, Day 937

IRS Logo 2Town Hall, A Small But Real IRS Reform That Must Pass:

President Obama's Department of Justice has made it official: Lois Lerner, the IRS executive who invoked the Fifth Amendment to avoid incriminating herself when questioned about her role in targeting conservative groups, will face no criminal charges. Worse, even the one IRS reform that enjoys broad bipartisan support in Congress - a ban on the IRS trying to assess gift tax on contributions to non-profit organizations, which they infamously attempted against conservative donors - has stalled in the Senate after passing the House unanimously early in the year. It should be included in one of the must-pass bills expected to pass in the next few weeks. ...

Rep. Peter Roskam's H.R. 1104, the Fair Treatment for All Donations Act, should be a priority in Congress. It passed the House without opposition back on April 15 after stirring words of support from Democrat John Lewis, who said: "This bill brings clarity to what has historically been uncertain tax treatment for contributions to social welfare organizations, agricultural associations, labor unions, and trade associations. With this bill, Mr. Speaker, amounts contributed to such organizations will not be subject to the gift tax. I urge all of my colleagues on both sides of the aisle to vote 'yes' for H.R. 1104."

Yet there has been no Senate action for six months, and opposition has actually surfaced from people who like fear of a politicized IRS deterring contributions to non-profit groups. Meredith McGehee, policy director for the Campaign Legal Center, a speech-restricting advocacy group, said: "It strikes me as a wrong-headed move at the wrong moment," and Congressional Quarterly described her as "worried the measure would remove a potential deterrent - the fear of potential gift-tax liability - for mega-donors."

The House need not acquiesce to Senate inaction on the issue. There will be a series of must-pass bills coming to the floor shortly and including H.R. 1104 on one of them should be a no-brainer to force Senate action and finally provide some small measure of control over an abusive IRS that so far has managed to avoid all accountability.

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