Ben Smith is reporting on a memo from LA tax lawyer Ofer Lion alerting his clients to IRS scrutiny of donations to 501(c)(4) organizations and the potential for “gift tax” liability:
Perhaps sparked by the significant media coverage of large contributions to politically-minded 501(c)(4) “social welfare organizations,” the IRS appears to have begun to actively pursue the gift tax on contributions to 501(c)(4)s.
Individual contributors and 501(c)(4)s may wish to consider carefully the possible gift tax implications of contributions, and to seek the advice of counsel. There may be alternative giving structures available to avoid gift tax liability, and both contributors and 501(c)(4)s need to be cognizant of the issues. 501(c)(4)s may face secondary liability for unpaid gift taxes owed by their contributors.