Any attorneys out there? Cash Gifting question

Question

I have a student who has asked me to find out whether cash gifting is legal. I have searched the FTC database and have also called the FTC and spoke with a representative. There are cases that are illegal, mostly involving orgs that misrepresent, or break the mail or phone laws. From a legal standpoint, legal or no?

Answer 1

The “gifting websites” usually have some excerpt from the IRS code in regards to estate and gift taxes to “prove” that gifting is legal. But somehow they forget to mention that they are soliciting others to give. In addition, in most cases the giver expects to receive (and usually pays extra for) a similar marketing website and “instructions” or “support” or “marketing” methods such as leads, or advertising support or other marketing resources to get their website read by others.

So in summary “cash gifting” is just an expensive online version of a chain letter which falls under “mail fraud”.

It’s true that giving gifts of cash to others is legal. However marketing oneself to receive such gifts is ILLEGAL and no stack of signed “gifting statements” or “non solicitation” letters will protect the person otherwise when the law begins to crack down on program operators and participants.

So the bottom line is giving others a cash gift itself is legal but soliciting others to send you cash in “cash gifting” programs and operating such or similar programs is ILLEGAL. Using excerpts from IRS code that pertain to estate and gift taxes is irrelevant and can be construed as attempting to defraud others into thinking they are getting involved involved in a legal activity. Instructing them to sign a “gifting statement” and/or “non solicitation letter” and then have them send money through the mail or wire it or send it online electronically can fall under the broad category of mail fraud.