According to Ben Smith at Politico, the IRS is about to do something HUGE with regards to anonymous funding. This may end up killing (or at least drying up a good chunk of their funding) before they get off the ground in 2012.
Here's the situation. Normally, contributions to 501c4s, c5s and c6s are generally not taxable gifts much like any political donation. Things may be about to change with the IRS increasingly focusing in on this type of donation. This may dry up the funding on all sides both Dems and Republicans.
It appears that the IRS Estate and Gift Tax team has also started paying attention to 501(c)(4) organizations," a Los Angeles tax lawyer who has followed the issue closely, Ofer Lion, wrote in a memo to clients today.
Gifts to other political organizations are not taxable under federal law, and lawyers informally say many donors do not typically pay the gift tax -- which may run as high as 35%, mirroring income tax rates -- for contributions to 501(c)4s.
This essentially means that donations to these types of organizations could hit as high as 35% in terms of taxable income. It would have to be reported to the IRS. This would make those rich individuals (who dislike taxes) think twice before contributing to these groups as their funding would be taxed. The IRS is going to focus in particular on HIGH INCOME FOLKS (Think Koch Brothers, Soros, etc.)
In fact it's already begun, there's part of a letter that a client of a reader of Smith's has already received this letter:
"The Internal Revenue Service has received information that you donated cash to [REDACTED], an IRC Section 501(c)(4) organization," the agent wrote to a donor. "Donations to 501(c)(4) organizations are taxable gifts and your contribution in 2008 should have been reported on your 2008 Federal Gift Tax Return (Form 709)."
Now here's the kicker, there's a bit of a trap for those who have ALREADY contributed to these groups.
The question of whether these (c)4 gifts should actually be taxable could be subject to litigation. But the reason for the emergence of (c)4 gifts presents a bit of a trap for donors: If they go to court to fight for the right to avoid taxation on their anonymous gifts, they will compromise their anonymity. Alternately, they may be forced to pay a hefty premium to remain anonymous.
So we may not even NEED the DISCLOSE ACT to get at these individuals. They may have to do it themselves.