IRS halts audits of donors to political committees

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The head of the Internal Revenue Service's enforcement division advised colleagues to shelve open audits of donors for 501(c)4 organizations–some of which, like Crossroads GPS and Moveon.org Civic Action, have been active in political campaigns.

The IRS had previously released a statement saying it was investigating five donors to political 501(c)4s, which do not disclose their sources of funds to the public, to determine if their contributions to the organizations should trigger additional gift taxes.

Steven T. Miller, deputy commissioner for services and enforcement, sent the letter to his colleagues, stating that, "This is a difficult area with significant legal, administrative and policy implications with respect to which we have little enforcement history. My office will be coordinating with the Office of the Chief Counsel to determine whether there is the need for further guidance in this area."