GOP chairman to IRS: Gift tax actions troubling

Camp’s letter was released several weeks after GOP members of the Senate Finance Committee – including Sen. Orrin Hatch (R-Utah), its ranking member – contacted Shulman with their own concerns about whether politics played a role in the IRS’ actions.

The IRS, media outlets reported last month, told the five taxpayers that previous donations to so-called 501(c)(4) groups might be subject to the gift tax. 

Michelle Eldridge, an IRS spokesman, said at that time that “these examinations are not part of a broader effort looking at donations to 501(c)4s.”

{mosads}“All of the decisions involving these cases were made by career civil servants without any influence from anyone outside the IRS,” she added.

Most of the work done by those groups, named for their section in the tax code, cannot be political. But becoming a 501(c)(4) has become an increasingly popular way for influential groups to organize, in large part because they don’t have to name their donors. 

Democrats have pushed, so far unsuccessfully, for measures that would require more disclosure for some of those groups. But some Democratic groups – including Priorities USA, started by former aides to President Obama – are also organizing as 501(c)(4)s. 

In his letter, Camp asks the IRS, by Friday, for a detailed explanation of how gift tax decisions are made, saying that the roughly 120,000 501(c)(4)s no longer had certainty in that area.

The Michigan Republican asks for, among other things, the names and titles of anyone involved in the decision to investigate whether donations to 501(c)(4)s were subject to the gift tax; IRS memos on the subject; and information on how many 501c4 audits are done annually. 

“This sudden, unexplained enforcement of the gift tax in these circumstances raises a number of questions regarding IRS actions,” Camp wrote.