Your tax client, Alan Simpsons, informs you that during the year he gave gifts of $10,000 to the Republican Party Central Committee and $20,000 to his niece on her graduation from college. He also tells you that the party used the money for its own operations and that he gave no other gifts to his niece. What do you tell Alan in regard to a federal gift tax return?

A. A gift tax return is not required to be filed

B. A gift tax return must be filed because of the political party contribution

C. A gift tax return must be filed since the total transfer exceeds $10,000

D. The gift to his niece may be taxable and must be reported on a gift tax return