A major takeaway from our Foundations on the Hill visits with 20 Congressional members rang loud and clear: Congressional staff need to hear from you.
Nonprofits: They want to hear about your impact in district and how changes to the charitable deduction will affect your work.
Foundations: They want to hear how you are making a difference in their district, who your partners are, and why your problem solving matters.
How you can reach out:
- A staffer of a Ways and Means committee member told us that you can share your comments and stories about charitable tax incentives by email: firstname.lastname@example.org until April 15 (find instructions here under Tax Reform Working Groups).
- Or, you can leverage your Donors Forum membership and share your stories with us; we can help make connections on your behalf with the relevant staff people. Email Delia Coleman, Director of Public Policy, at email@example.com.
Congressional staffers and other experts urge charities to join tax reform discussion
At the annual Washington Nonprofit Legal and Tax Conference held recently, congressional staffers and other panelists strongly encouraged charities to make their voices heard during the current debate on tax reform. Harold Hancock, Tax Counsel for the House Ways and Means Committee, said that the Committee welcomes input from the charitable sector. He noted that one of the eleven tax reform working groups that Ways and Means set up to gather more information as part of the tax reform process is dedicated to charitable and other tax-exempt organizations. He also added that the Committee does not have particular legislation in mind regarding tax-exempt organizations.
“Right now we're listening, we're trying to get feedback," he said. "We want to make sure that wherever we end up with regard to policy decisions of the exempt sector, it is well known beforehand, that people have had a chance to comment and have had a chance to look at it,” Hancock said. The Ways and Means Committee has developed a process for interested parties to submit comments to the tax reform working groups, but Hancock said that the Committee is willing to accept comments outside of the working group process. The panelists also addressed proposals to limit the charitable deduction as a potential way to raise revenue.
Geoffrey Plague, Vice President of Public Policy at Independent Sector, said that limiting the deduction would cause charitable giving to decline and that the real focus should be on those served by charities who would most be impacted by a decrease in giving. Gordon Clay, Legislative Counsel for the Joint Committee on Taxation (JCT) also discussed what topics might be addressed if the tax reform debate moves beyond incentives for giving to qualifications for exempt status. Clay noted that the debate could consider what types of activities deserve exemption, exempt organizations pursuing commercial activities, large endowments, the blurring of the lines between public charity and private foundation status, and political activities by exempt organizations. Source: Independent Sector; BNA Daily Tax Report, Tax Analysts
New IRS data indicates increase in charitable deductions claimed on gift tax returns in 2011
According to new gift tax statistics of income (SOI) data released by the Internal Revenue Service March 19, the amount of charitable deductions claimed on gift tax returns in 2011 rose to nearly $4.4 billion, up from $3.1 billion in 2010.
The SOI data shows that in 2011, taxpayers made almost $51 billion in total gifts of money or property, up from 2010 when $37.9 billion in gifts were made. Approximately $9.3 billion in annual exclusions from the tax were utilized in 2011, but donors still paid almost $6.2 billion in total gift tax on 10,982 gifts, compared to the total tax in 2010 of about $2.5 billion on 9,645 gifts. The gift tax is a mechanism for taxing the transfer of assets from one party to another. For 2013, the annual exclusion for gifts rose to $14,000, up from $13,000 for 2012, due to inflation adjustments, while the lifetime exemption amount, after inflation, is $5.25 million for both gift and estate tax purposes. Read the new SOI data. Source: Independent Sector; BNA Daily Tax Report.
Earlier this month, the Administration for Children and Families (ACF) at the U.S. Department of Health and Human Services (HHS) sent a letter to states regarding the impact of sequestration on Community Services Block Grants (CSBGs). The letter indicates that ACF is required to reduce overall payments for fiscal 2013 by 5.0 percent to implement the sequester.
Given that payments have already been made for the first two quarters of the fiscal year, the letter explains the remaining quarterly payments will be reduced by roughly 10 percent. A similar letter was sent to states about the Social Services Block Grant (SSBG) program. SSBGs, a mandatory spending program not exempt from the sequester, are subject to a 5.1 percent reduction as a result of the sequester. Therefore, the remaining quarterly payments for fiscal 2013 will be reduced by approximately 10.2 percent. Both letters indicate that additional details will be provided by grant management staff at a later date. (Source: NASBO)
Will sequestration threaten the way you perform your mission? Share your story at GiveVoice.org.
~Delia Coleman, Director of Public Policy, Donors Forum