Oklahoma Policy Institute: Private school tax subsidy blurs the line between charitable gift and money laundering

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Carl Davis is Research Director at the Institute on Taxation and Economic Policy (ITEP), a non-profit, non-partisan research organization that works on federal, state, and local tax policy issues.

Photo by ccPixs.com / CC BY 2.0
Photo by ccPixs.com / CC BY 3.0
When is a charitable contribution not a “donation” at all?  If a taxpayer manages to turn a profit on the deal, has anything altruistic actually occurred?  The clear answer is no.  But a new report from my organization, the Institute on Taxation and Economic Policy, reveals that the Internal Revenue Service (IRS) does not always see it that way, at least with regard to certain state-subsidized “gifts” that Oklahomans are making to private K-12 scholarship funds.

When is a charitable contribution not a “donation” at all?  If a taxpayer manages to turn a profit on the deal, has anything altruistic actually occurred?  The clear answer is no.  But a new report from my organization, the Institute on Taxation and Economic Policy, reveals that the Internal Revenue Service (IRS) does not always see it that way, at least with regard to certain state-subsidized “gifts” that Oklahomans are making to private K-12 scholarship funds.

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