Thread by @JuddLegum

1. Charles Koch recently transferred more than $5 billion to two secretive organizations

The donations are structured to allow Koch to avoid BILLIONS in taxes but the money can still be used directly in political campaigns

It's an audacious scheme

Here is how it works

🧵

2. Koch donated $4.3 billion to Believe In People, a newly formed 501(c)4 non-profit run by three of his closest associates. He also donated $975 million to CCKc4, which is controlled by his son, Chase Koch.

In a recent IRS filing, CCKc4 listed its mission as "N/A."

3. But while little is known about the current activities of Believe in People or CCKc4, as 501(c)4 organizations, a large percentage of their assets — in this case, billions of dollars — can be spent directly on political campaigns.

popular.info/p/charles-koch…

4. By exploiting a loophole, Koch was able to make this money available for political spending without paying a dime in taxes.

It's not surprising that Koch is familiar with the loophole — he spent hundreds of thousands of dollars lobbying to create it.

5. Large donations to charitable causes are not subject to gift taxes. But, after Citizens United, 501(c)4 orgs began to engage directly in political campaigns, which are not charities. So, in 2015, the IRS began considering imposing the gift tax on these kinds of donations.

6. Koch made his donations to the new 501(c)4 orgs in the form of stock. Koch could have given the stock to a 527 political org, which are exempt from gift taxes. But, a gift of stock to a political organization is considered a sale. That means Koch would pay capital gains tax.

7. In 2015, former Congressman Peter Roskam (R-IL) proposed the "Fair Treatment for All Gifts Act," to specifically exempt contributions to 501(c)4 from the gift tax. Politico described it as a "tax exemption for megadonors."

8. Charles Koch, through Koch Industries, hired a lobbying firm, Siff & Associates, PLLC, to advocate for Roskam's bill and related issues. In 2015 and 2016, Koch paid Siff & Associates $180,000 to push for the new gift tax exemption.

9. One of the political organizations Koch created and funds, Americans for Prosperity, also advocated for Roskam's gift tax exemption.

10. Ultimately, Koch's lobbying efforts paid off. Roskam's legislation was quietly included in a must-pass omnibus spending bill in December 2015. Now, Charles Koch is taking full advantage of the loophole he helped create.

popular.info/p/charles-koch…

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