IRS Sends Tax Letters to Five Big Political Donors

Political donations are not tax deductible. If I were to contribute money to a political campaign, I can’t then claim a deduction for that contribution on my Form 1040. It’s not really “charitable,” is it? In fact, one big issue in the last Presidential election was the growing role of churches in politics and how churches could risk their non-profit status if they become too involved. Politics and charity are to be separate, with political donations being non-deductible and charitable donations being deductible.

Here’s where it starts to get tricky, as everything taxes seems to be. There are plenty of organizations that are political in nature whose “primary purpose” is political. The rub is that if you were to contribute funds to one of these obviously political organizations (wink wink not it’s primary purpose nudge nudge), you can get a tax deduction. I think anyone can support any organization they want, but if it’s political then you shouldn’t get a tax deduction from it!

The reason why this is bigger news is because the IRS recently sent letters to five donors because they were donating vast sums. Large enough that they fell under gift tax laws, which doesn’t kick in for this type of thing until you reach pretty large sums.

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