Insights
Publications

IRS Reverses Course on 501(c)(4)'s and Gift Tax

7/19/2011 Articles

In our May 24, 2011 article "Can Donations Be Taxed?", we cautioned that the IRS was investigating individuals' contributions to IRC Section 501(c)(4) organizations—commonly known as social welfare organizations—as subject to gift tax. 

At the time, we questioned the constitutionality of taxing such contributions.

We are pleased to announce that the IRS has issued the following pro-taxpayer statement:

"Recently, questions have arisen regarding the applicability of the gift tax to contributions to 501(c)(4) organizations....While we review the need for additional guidance or legislation, we will not use resources to pursue examinations on this issue.  Any future action we take will be prospective and after notice to the public."

While Congress may eventually pass legislation prohibiting such contributions, the IRS has now made it clear that until such time, individuals may contribute unlimited funds to 501(c)(4)s without fear of being subject to gift tax or running afoul of campaign finance laws (as you may recall, 501(c)(4)s are not subject to the jurisdiction of the Federal Election Commission).

We will keep you abreast of future developments in this area. In the meantime, please do not hesitate to contact us with any questions.

Firm Highlights

Event

Policy Advocacy and Lobbying by Public Charities and Private Foundations: Do's, Don'ts and Depends

Cynthia Rowland speaking on "Policy Advocacy and Lobbying by Public Charities and Private Foundations: Do's, Don'ts and Depends" at our October Nonprofit Education Series. 

Read More
News

40 Farella Braun + Martel Attorneys Named to 2019 Northern California Super Lawyers and Rising Stars

SAN FRANCISCO, July 8, 2019: Forty Farella Braun + Martel attorneys across practice areas were named to the Super Lawyers and Rising Stars lists of top attorneys in Northern California for 2019. Farella attorneys...

Read More
Publication

How to Plan for Successful Winery, Vineyard Business Succession

Harnessing the energy and ambition that tends to surface at the start of a new year, now may be a good time to consider your personal estate and business succession planning. Developing a plan...

Read More
News

Melissa S. Hung Named a 2019 Asian American Bar Association LEAD Fellow

Read More
Publication

Nonprofits and the California Consumer Privacy Act

The new California Consumer Privacy Act of 2018 (CCPA) will come into effect January 1, 2020. In most situations, nonprofits won’t be subject to the law—but in some cases they necessarily will be and/or...

Read More
News

Farella Braun + Martel Attorneys Recognized in The Best Lawyers in America© 2020

Read More
Publication

Succession Planning for Wineries and Vineyards

As wine families tend their grapes, so too should they tend their business succession planning. Wineries and vineyards are unique assets to consider when crafting personal financial, estate and business succession plans for clients...

Read More
News

Farella Recognized in Chambers High Net Worth Guide for Private Wealth Law in Northern California

SAN FRANCISCO, July 16, 2019: Farella Braun + Martel’s Private Client Practice is again honored in the Chambers High Net Worth (HNW) guide as a leading firm in the Private Wealth Law category for...

Read More