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February 27, 2015

House Bill Would Ban Gift Tax on Donations to Nonprofits

A member of the House Republican leadership introduced a bill Thursday to bar the Internal Revenue Service from seeking to collect the gift tax on any contribution to a nonprofit organization, reports The Washington Times. Illinois Rep. Peter Roskam, who chairs the Ways and Means oversight subcommittee, said the measure is aimed at preventing the tax agency from targeting donors based on their political beliefs.

The IRS initiated an effort in 2011 to enforce a little-observed law levying the 35 percent gift tax on contributions of more than $14,000 to 501(c)(4) organizations, sending audit letters to five unidentified advocacy-group donors. The agency reversed course under pressure from congressional Republicans, but Mr. Roskam said the law should be changed to prevent a recurrence.