GoTaxMe: Crowdfunding and Gifts

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Jeffrey Kahn


In 2018, Peter Strzok was fired from the FBI, based on text messages that he sent denigrating President Trump. A week later, a group set up a GoFundMe page soliciting funds to help with his “legal costs” and to replace his “lost income.” As of early September, that fund had raised over $450,000. GoFundMe states on its website that donations made are usually considered to be “private gifts” and not taxable to the recipient. Using Strzok’s campaign as an example, this Article will discuss the current standards for determining whether a transfer qualifies as a nontaxable gift and the policy rationale for the exclusion of gifts. The Article argues that, contrary to the common conception of what qualifies as a gift for tax purposes, there are some circumstances in which the intention of the transferor should not control the characterization. Instead, in those circumstances, the role of the transferee should control. The Article concludes that GoFundMe’s positon is incorrect and funds collected using GoFundMe (and other crowdfunding websites) should be treated as income to the recipient.

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