Gift tax in the United States
If a person is a non-resident alien for purposes of gift tax, taxation of gifts is determined in a different way. If the property is not located in the U.S., there is no gift tax. If it is intangible property, such as shares in U.S. corporations and interests in partnerships or LLCs, there is no gift tax.
IRS targeting controversy
In 2011, audit letters were sent to five donors to a now-defunct conservative 501(c)(4) group, Freedom's Watch, which were involved in the 2008 election cycle. The goal of the audit was to assess whether or not gift taxes needed to be paid on these donors' donations to Freedom's Watch. The Congressional Research Service said that the audit was legally well-founded, as tax law exempts only 501(c)(3) and 527 groups from gift taxes. However, Ari Fleischer, a board member of the group, alleged that the group was being singled out. According to tax experts, the IRS had not been enforcing that law, but tax lawyers had advised their clients that they might owe the tax, leading to a situation where some paid and some did not. The audit appeared to indicate a new emphasis on enforcing the law, but political opposition from Republicans in Congress led to the IRS dropping the audit and publicly announcing that it would not levy gift taxes on contributions to 501(c)(4) groups. Inspector General J. Russell George's report recommended that the IRS create clearer rules and conduct more training for employees on 501(c)(4) issues, including gift tax exemptions.