Thursday, May 12, 2011

I.R.S. Begins Enforcing Rule on Gifts to Political Nonprofits -

Big donors like David H. Koch and George Soros may owe taxes on their millions of dollars in contributions to nonprofit advocacy groups that are playing an increasing role in American politics.

The organizations in question were established as nonprofit corporations under a section of the tax law, 501(c)(4), and the rules governing them say their primary purpose cannot be political. Unlike contributions to charities, however, donations to these groups have always been subject to a gift tax. But tax experts and campaign finance experts say the I.R.S. had not enforced that rule, until now.

extent of the agency’s inquiries was not known, nor was it known whether Obama administration officials were involved in initiating the I.R.S. actions. The White House would not comment, nor would the I.R.S.

  If the I.R.S. enforces the tax rule broadly, experts are sensing that it could act as a counterweight to tamp down donations on one side, as another anticipated set of big corporate, union and like-minded political contributions flood campaigns through the barriers lifted by last year’s Supreme Court ruling in the Citizens United case.

I.R.S. Begins Enforcing Rule on Gifts to Political Nonprofits -