It seems to me that if you want to play at rigging elections by giving millions of undisclosed cash to organizations dedicated to a specific political agenda you ought to have to pay the tax man. I could be wrong of course. I was never a tax lawyer, but this argument seems correct on its face:
On Monday, Campaign Money Watch, a project of Public Campaign Action Fund, planned to send letters to five Republican-allied groups that are incorporated as nonprofits under Section 501 (c)(4) of the tax code and to the U.S. Chamber of Commerce asking whether they advise their donors to pay the gift tax. […]
The burden for paying the tax does not fall on the organizations, but with the donors themselves.
Under the law, gifts greater than $13,000 – or $26,000 per couple – are taxable at a 35 percent rate. That means a $1 million gift carries a $350,000 tax with it. […]
“The issue is whether if I give $1 million to Karl Rove and tell him to buy ads across the country, is that a gift or am I giving him a task and paying him to do it?” Owens said.
That places the donation in something of a gray zone. If the gift gets nothing in return then it’s taxable; if it’s too specific about where political ads should be placed, then it could trigger disclosure to the Federal Election Commission.
Either way, I’d like to know who is really funding the massive election campaign ads against primarily Democrats. I know it isn’t millions of donors contributing just a few hundred dollars.
Seems like a bit of a symbolic move. How can you prosecute someone for failing to pay the gift tax if you don’t know who he is?
It’s a tactic to get discovery. Nothing symbolic at all. Once you have discovery, then you can sick the IRS on them.
I went and read the whole article and I don’t see where there is any litigation involved in this.
It’s a move to make people declare the gift tax on their returns or disclose the contribution. If you don’t pay the gift tax you leave yourself open to tax fraud charges. If you want to avoid the tax you have to declare publicly that your intent was not to make a gift but was for a specific purpose.
It’s a calculated move to get some donors to reconsider these large undisclosed contributions to organizations which are known to be vehicles merely to run political attack ads. In the short term there will be little little impact this election cycle since most of the contributions have already been made but perhaps in the long term it might temper the appetite for pouring money into political “campaigns” without disclosure.
Most likely there will be. First step is to get a ruling from the FEC.