Are Cash Gifting Programs legal and do they work?

This was the first thing that came to my head when I first heard of this activity: this can't be legal. But to my surprise, it is, in fact, a legal activity, here's why.

In researching this activity, I learned that both American and Canadian citizens have the Constitutional right to gift property, cash and other assets. The U.S. gifting rules are found in the IRS Tax Code, Title 26, Sections 2501-2504 and 2511.

The law states that one or more individuals can give a gift to another individual of up to $12,000 each per calendar year without any tax liability to either the giver or receiver of the gift, because the tax on the gift has already been paid. These gifts are not included in the gross income of the recipient.

It is NOT pyramidal, but linear in structure. There's no "fat cat" at the top benefiting from others. A person starting today can easily generate more money than someone that's been in a year. Copy cat programs in the past were closed because of this illegal structure, which we are NOT.

I also found that most well organized Cash Gifting programs use a Gifting Statement and Non-Solicitation form, which when signed, are binding agreements between two individuals. These forms are used, it's said, to ensure the longevity of a program.

Now, I'm not here to paint a rosy picture and tell you that ALL Cash Gifting programs are legal. Certainly there are some that are not. Unfortunately, there are "old school" Cash Gifting programs out there that weren't structured properly in order to sustain their efforts for any considerable length of time, and some of them use an illegal pyramidal type of structure. Consequently, copy cat programs in the past were closed because of this illegal structure and gave Cash Gifting a bad reputation.

However, in recent years, with the creation and development of the linear "1Up" structure, things have changed and more and more people are benefiting through the use of these types of programs than with any other Cash Gifting structure in the World.

With a 1Up type of Cash Gifting program, there are no fancy sounding "positions" to sell, no "matrix" to fill, and there's no ever-widening base to the structure (In a typical illegal pyramid, only those at the top profit while those at the bottom never reach the top and invariably lose their money).

Cash gifting is illegal.

Plain and simple.

First, understand that a ponzi scheme is what this is moreso than a pyramid scheme...although either would apply here, the ponzi has the most accurate definition.

Lets talk about it in these terms:

A ponzi scheme is any scheme in which new investors (i.e. gifters) have to be brought in to pay those already in. This creates an endless need for new investors which will eventually crumble, leaving many people who will receive nothing. This is part #1 where it is illegal.

Here is part #2: It has nothing to do with U.S. Mail vs. FedEx (although this is another issue altogether), but it does fall into the enticement laws of many states. In short, if you are enticing someone of investing (or giving) in hopes of return, then you fall into these laws. Sames goes with business opportunities. The only difference is, with a legitimate business, you have actual products that are being sold or services being paid for.

So why are these people posting their face with all this money on YouTube?

They are ignorant of the laws, but that will not exclude them from being prosecuted if it draws the right regulatory attention.

With that being said, lets look at the lies that gifters like to tell:

1. It is legal to give up to $XXXXXX to someone as a gift.

Yes, it is legal...if you are expecting no return. Besides, this has to do with tax reporting. The laws gifting schemes violate deal less with taxes and more with consumer fraud.

2. It is legal as long as everyone follow the rules:

Well, here's my test for you: Take your name, address, how you are doing the gifting program, and go to your state Attorney General. Lay out the full plan to them. Tell them that you send a gift of $X amount to someone, and then you look for others who will give you $X amount (or to someone else within the program), and so forth. Explain exactly how you gave the money in expectation of receiving the money.

And if you are apprehensive about doing this, I'd advise you quit what you are doing and find something honest and reputable to do.

Still need proof?

Regardless of what you think of Rod Cook, he has a resource on his website talking about gifting schemes...what I am posting here is a link to external news stories about people being arrested, fined, etc, for running and/or participating.

If you can read this and still feel good about what you are doing, then you have no right to complain when the government takes your house, your cars, seizes your bank accounts, etc (its called forfeiture, you should read up on it).

http://www.mlmwatchdog.com/Resources_Gifting.html

brentw: Cash gifting is illegal.

Plain and simple.
If it is so plain and simple, simply post the statutes, federal and or local, which gifting plans violate.
Then show which gifting plans are in violation of that statute and how.

The page your link references is anything but 'plain and simple'!

Your link refers to pyramids and other scams.
Cash gifting has nothing to do with Ponzi - there is no 'interest' paid on an 'investment' whatsoever. There is no payout to old 'investors', from the money of new 'investors'. Nothing like that at all.

Ponzi has NOTHING to do with cash gifting.
Nothing whatsoever!

None of the examples on the page your link points to have anything to do with any cash gifting plan I know about.
Not all cash gifting is structured as a pyramid.
And many have products you receive as part of your 'gift' payment, which makes even a pyramid structure legal.
That also makes it not even a 'gift'.

Just post the statute that gifting clubs violate.
Realize that all gifting plans are not structured the same way.
Show who has been prosecuted for which gifting plan.
NOT pyramids!

Who has had their home, car, bank accounts etc. seized for cash gifiting?
NOT pyramids!

Specifically what cash gifting plan has been prosecuted/shut down solely for cash gifting?
NOT for being a pyramid.


If cash gifting is so 'illegal plain and simple', you should be able to show that in a 'plain and simple' way.

These links should help people make a decision that they feel comfortable with. If what you are doing does not fit into what is indicated in these links - great!

http://www.cashgiftingwatchdog.com/basics/cash-gifting-law/

http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt056.shtm

http://www.bbb.org/us/article/little-bernie-madoffs-abound-on-the-internet;-bbb-warns -cash-gifting-pyramid-schemes-flourishing-online-9865

I'm sorry, but I had to laugh when I saw this thread. I don't know why it's funny, but it is. Everyone seems so sure of the facts, but no one agrees. One post: Cash gifting is totally legal and here's why. The next post: Cash gifting is completely illegal, pure and simple. Is there a lawyer in the house?

I am still waiting to hear from the "Cash gifting is completely illegal, pure and simple." group.
Something so 'pure and simple' should be very easy to illustrate.
That should be your first tip that somebody doesn't know what they are talking about.

To those who have posted misleading links, that have nothing to do with legal cash gifting, and do NOT show where ANYONE was convicted ONLY for cash gifting:
Those misleading links, posted in this thread, refer to PYRAMID and PONZI schemes ONLY.
They also refer ONLY to people prosecuted for other fruadulent activity (tax evasion, theft by deception, etc.).
NOT CASH GIFTING!!!

A few quotes from the misleading links posted in this thread:
1)
In reality, the clubs are illegal pyramid schemes. New club members give cash "gifts" to the highest-ranking club members, with titles such as "captains." And they're promised that if they get additional members to join the club, they, too, will rise to become captains and receive money ??“ far more than they initially paid to join the club -- from newer club "friends."
2)
Like most pyramid schemes of the past, cash gifting operations are...
3)
"Bernie Madoff isn't the only guy with a ponzi scheme; money-making opportunities promising big returns for little work are all over the Internet and are extremely enticing to millions of people struggling with today's economy," said Steve Cox, BBB spokesperson. "Anyone tempted by slick cash gifting marketing appeals should run in the opposite direction, or they run the risk of being the next person ripped off by a pyramid scheme."

PLUS,
It should be obvious, that most of these people 'serving the public' with their 'watchdog' activities, have their own MLM scams to promote.
Their task is to get you to forget about cash gifting, or any other plan but their own, and then get you to sign in on their 'legal' MLM plan - which is often a scam itself!

In short, these links have nothing to do with legal cash gifting.

FINALLY,
Here is a link that explains the hidden agenda, fraud, bait & switch, and misinformation campaigns, behind those who are sooo motivated to 'make people aware' of the dangers of cash gifting:
http://cashgiftingcabbie.blogspot.com/2009/09/is-cash-gifting-illegal-or-legal-here.h tml

Please people, do your own research, and think for yourselves!

DON'T fall for tha hype!!

This is what I don't get everyone is totally contradicting themselves, gifting is by free will only, there are no promises, it is def legal so stop the whining.. it is not a business and a pyramid scheme has a product, these individuals are choosing to give, and they are choosing to receive, but nobody expects anything, with that being said i have one question? Don't you do what you please with your money, everybody is always either hating or prying into others decisions, I'd say shut it up... if you're not a gifter then you're not a gifter stop crying! geez..find some time to do something productive instead of complining! if you are a gifter! then you are a gifter, so do what you do! one thing for sure is... NOBODY IS GOING TO JAIL.. so quit the water works! uuuggghh!