Representative Peter Roskam (R-Ill.) introduced H.R. 1104, the “Fair Treatment for all Gifts Act”in order to ensure that donations to 501(c)4, (c)5, and (c)6 organizations are not subject to the gift tax. Federal law mandates that gifts in excess of $14,000 are subject to the gift tax, but donations to nonprofit organizations have always been considered tax-free. However, in recent years the IRS was threatening to apply the gift tax to such contributions on an ad hoc basis until the Committee commenced oversight into the matter and the IRS abruptly stopped the practice.
Roskam, Chairman of the Subcommittee on Oversight of the Ways and Means Committee, explained:
“Americans who donate to tax-exempt organizations should always be treated fairly and equally by the IRS—an agency with an infamous track record of targeting individuals for their religious and political beliefs. Although the IRS claims it is no longer seeking to curb giving to social welfare organizations, we need assurances that this practice will never happen in the future. The Fair Treatment for All Gifts Act, which will codify the longstanding practice of exempting these contributions from the gift tax, marks an important step in shielding Americans from further burdensome taxes and intrusive scrutiny by the IRS.”
H.R. 1104 will help to ensure that IRS does not discriminate against certain nonprofit organizations, as it has done in the past. Grover Norquist, President, Americans of Americans for Tax Reform explains the importance of this legislation:
“It was clear then that the IRS was seeking to pervert the gift tax and use it as an intimidation device against potential donors to conservative non-profits. This was happening at the same time as Lois Lerner was denying conservative and Tea Party non-profits the ability to organize and get tax status, so it’s clear the gift tax gamesmanship was part and parcel of the same conspiracy against the conservative movement by the IRS.”