Tuesday, August 23, 2011

Tobin on 501(c)(4)s and the Gift Tax

Donald Tobin Donald Tobin (Ohio State) has written a letter to the editor of Tax Notes Today regarding the recent decision by the IRS to drop gift tax audits of donors to section 501(c)(4) social welfare organizations in the face of congressional criticism.  Unlike some commentators, he does not fault the IRS either for opening the audits in the first place or for making what he views as a "practical and pragmatic" decision to end them while it reexamines it position on this issue.  Rather, he criticizes the members of Congress who sent public letters to the IRS criticizing the audits for seeking to "harass and intimidate" the IRS in order to protect "powerful and politically connected donors" rather than letting the IRS apply the law as written.  In Tobin's view, "If Congress does not want the IRS to engage in audits of (c)(4)s, Congress should not impose those responsibilities on the IRS. What is unfair is to impose those responsibilities on the agency and then accuse it of playing politics when it enforces the very provisions passed by Congress."

Hat tip:  Tax Prof blog.



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