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 Often people that we share this
wonderful activity with have been misinformed about the
overall legality of cash gifting and need some comfort
that they are not going to be participating in something
that could get them into trouble. Well, here are the
facts and GGC has been designed to comply with all the
regulations detailed below, making this an activity well
within the law.
In the United States of America, a cash gifting program must conform to the Internal
Revenue Service tax code, and must be a gift from an
individual without an exchange for products or services
as well as without coercion or other influence of force.
The gift must be less than 13,000 per individual per
tax year (as of Jan 2009), according to the IRS Tax Code Title 26
and Publication 950, to be tax exempt.
Also, for any cash gifting system to be legal, it cannot
declare itself to be an investment or business
opportunity. Investments are covered under a strict set
of guidelines and regulations controlled by the
Securities Acts, and gifts do not fall under these
regulations. The Securities Acts were put in place as
far back as 1933 to create protections after the stock
market crash. There have been some changes since then to
investments and banking, notably in 1975 when the SEC
was given the ability to create a national market in
securities to help promote a more competitive and
efficient system.
Money in a cash gifting system can only flow in one
direction, from the giver to the receiver. According to
the law, business transactions are a two-way deal,
between buyer and seller, as both parties are receiving
something in the exchange. In the gifting scenario the
person giving receives nothing from the person receiving
the money; therefore no exchange of anything is created.
The participant in the gifting system is not earning
money, but merely receiving a gift with no obligations
or strings attached. In a business scenario there is
always some obligation by both parties to be upheld."
Of course, the above cannot and
should not be construed as tax advice. It is suggested
if you have concerns, that you talk to trusted
counsel and/or make your own determination through your
own research.
Another source of information is Title 26, Chapter 12 Estate and Gift Taxes:
IRS Gift Tax Exclusions
Questions about "schemes"?
Please be responsible in your choices.
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