IRS formally ends gift tax probe of 501(c)(4) contributors

On July 7, IRS announced on its website that it will no longer pursue the issue of whether the gift tax applies to contributions made to Code Sec. 501(c)(4) social welfare organizations. An accompanying memo from IRS’s Deputy Commissioner for Services and Enforcement formalizes the decision with instructions to IRS personnel to stop pursuing the issue. IRS’s decision to throw in the towel on the issue comes in the wake of withering criticism from Congressional Republicans that the gift tax probe was a reversal of long-standing policy and was politically motivated.

Source: Federal Tax Updates on Checkpoint Newsstand tab 7/8/2011

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