Internal Revenue Service rules required the committee to make an assessment of each victim's needs in order for payments to be exempt from federal gift taxes.

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Gift or no gift, tax-exempt organizations are not supposed to give large sums to select private individuals.

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But such a reversion would exempt any income or appreciation that occurs after the gift date, say experts.

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Specifically, the IRS was looking into whether donors to certain tax-exempt organizations organized under section 501(c)(4) of the Tax Code would be liable for gift tax on donations that were, in many cases, well into the six figures.

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