In 2010, after receiving Baucus’s letter, the IRS considered the issue of auditing donors to 501(c)(4) organizations, alleging that a 35 percent gift tax would be due on donations in excess of $13,000. The documents show that the IRS wanted to cross-check donor lists from 501(c)(4) organizations against gift tax filings and commence audits against taxpayers based on this information.Under Obama the IRS treated the administration's enemies in ways Dick Nixon could only have dreamed of.
A gift tax on contributions to 501(c)(4)’s was considered by most to be a dead letter since the IRS had never enforced the rule after the Supreme Court ruled that such taxes violated the First Amendment. The documents show that the IRS had not enforced the gift tax since 1982.
But then, in February 2011, at least five donors of an unnamed organization were audited.
The documents show that Crossroads GPS, associated with Republican Karl Rove, was specifically referenced by IRS officials in the context of applying the gift tax.
Seemingly in response to the Crossroads focus, on April 20, IRS attorney Lorraine Gardner emails a 501(c)(4) donor list to former Branch Chief in the IRS’ Office of the Chief Counsel James Hogan. Later, this information is apparently shared with IRS Estate Gift and Policy Manager Lisa Piehl while Gardner seeks “information about any of the donors.”
It is really long past time for major reform at the IRS. One would be a much flatter,easier to administer tax system, to take some of the power out of their hands, a good idea for other reasons as well.
My own personal favorite is what I like to call my "modest proposal" for IRS reform:
What I propose is affirmative action with regard to politics. Congress must pass a law that stipulates that the new hiring for any agency must consist of liberals, conservatives, libertarians and communist in proportion to their representation in the voting population of the country (not the region the federal jobs occur in, which would tend to also be very liberal). Thus, in time, conservatives could expect to claim approximately half of the federal jobs in the county.
. . .
Thus, with a diversity of opinion reflecting the countries split on important issues, the few "rogue" liberal agents in the IRS (and other agencies with a political diversity issue; EPA and Education likely have similar issues), would be balanced by conservatives who would scotch any attempts to twist the agencies goal to a liberal line. Similarly, liberals would tend to be sensitive to and resentful of conservative attempts to do the same.