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View Diary: Breaking: IRS to go HARD after American Crossroads/Priorities USA (240 comments)

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  •  501(c) organizations ... (4+ / 0-)

    are tax-exempt organizations.  That means the organization doesn't pay taxes.  That doesn't tell you anything about whether the donor pays taxes though.  With 501(c)3 public charities, donations are also tax-deducible.  That means the donor can deduct donations (up to a certain limit) from his gross income.  501(c)4 contributions aren't tax deductible.   Completely independent of that, we have a Estate and Gift Tax system in this country.  When you make a gratuitous transfer (i.e. a give someone something and get less than full market value in return), that is subject to gift tax, unless exempted by another statute.  The donor pays gift tax rather than the donee.  (The first $13,000 is exempt ($26,000 for a married couple), so don't worry paying gift tax when you give Christmas gifts.)  There is no statutory exemption from gift tax for contributions to 501(c)4s.  The result of this IRS effort will likely be organizations re-organizing as 527s instead of 501(c)4s, since 527s are exempt from gift tax.  

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