Obama IRS to Political Donors: We Know Where You Live
In the crossroads, er, cross-hairs, are nonprofit groups that register under section 501(c)(4) of the tax code and spent millions on political advertising in the last election cycle. Big donations to those groups, the agency now says, should have been subject to gift taxes and may be owed retroactively. In a letter to one donor, the IRS noted that it "had received information that you donated cash to . . . an IRC Section 501(c)(4) organization . . . and your contribution should have been reported on your 2008 federal gift tax return."
The letters are especially odd since the purpose of the gift tax has traditionally been used in coordination with the estate tax, to prevent people from avoiding the tax by divesting their wealth before they die. Contributions to 501(c)(4)s aren't a routine death tax avoidance mechanism, and the contributions now under scrutiny are a pittance compared to overall gift tax revenues. So, hmmm, what could be the reason to start asserting the provision now, and only against a handful of high-profile political donors?
All this is done in the name of "transparency," which is a nice way of saying, we know where you live. The real goal is to intimidate business and big donors from giving money to Republicans.
...Unleashing the IRS is an especially nasty turn.