House Ways and Means Approves IRS Oversight Bills

The House Ways and Means Committee passed a half-dozen bills last week that are aimed at strengthening oversight of the Internal Revenue Service (IRS), including a measure clarifying that donations to tax-exempt organizations should not be subject to the gift tax.

All of the IRS bills passed with bipartisan support and could be on the House floor as early as April 13 when lawmakers return from a two-week recess.

House Ways and Means Committee Chairman Paul Ryan (R-WI) said the bills are common sense measures aimed at holding the IRS accountable to taxpayers.

“All we’re saying are things like, ‘Don’t target people because of their political beliefs. Don’t tax donations to tax-exempt groups. Don’t send taxpayer information to your private email.’ Pretty simple stuff,” Ryan said  (opens in a new tab).

Several of the oversight bills stem from the 2013 revelation that people within the IRS were targeting conservative political groups seeking tax-exempt status.

Meanwhile, Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-IL) introduced the Fair Treatment for All Donations Act  (opens in a new tab), which explicitly states that donations to 501(c)(4), (c)(5), and (c)(6) groups are deductible when reporting taxable gifts for the year.

Donations to tax-exempt organizations have always been considered tax-free, but Roskam said the IRS has in the past sent letters to donors notifying them that their contributions to 501(c)(4) political groups may be subject to the gift tax. The gift tax kicks in for gifts in excess of $14,000 annually.

“Americans who donate to tax-exempt organizations should always be treated fairly and equally by the IRS,” Roskam said  (opens in a new tab). “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.”

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