20 February 2015

ACR News 02.20.15 – House and Senate Advance Charity Legislation

>> Federal: Senate Finance Committee Approves Charitable Bills
>> Federal: Tax Reform Talk Continues
>> Federal: ACR Summit
>> Consider This: What is the end game?
>> Top Reads: Obama Budget Again Calls for Limit to Charitable Deduction


Washington Roundup

Before leaving town for the Presidents’ Day recess, the House passed H.R. 644 – the America Gives More Act of 2015 – by a vote of 279 to 137. This bill would streamline the private foundation excise tax to a flat one percent (a longstanding ACR priority) while also making permanent the IRA charitable rollover, the deduction for conservation easements, and the deduction for gifts of food inventory.

The vote fell generally along party lines, with Democrats objecting because the bill is not paid for, and because they would like to take up tax provisions through a comprehensive tax reform effort. However, upon passage of the bill, Ways and Means Chairman Paul Ryan (R-WI) said Congress needs to “get off this merry-go-round” of continually renewing various tax incentives. “We all know that businesses and charities need the kind of certainty that we are providing,” Ryan added.

At this time, it is unclear whether the Senate will take up H.R. 644.

Senate Finance Committee Approves Charitable Bills

Last Wednesday, the Senate Finance Committee marked up and approved a package of 17 miscellaneous tax bills by voice vote, three of which impact the nonprofit sector. The first applies the charitable deduction to agricultural research organizations, the second creates an exception to the excess business holdings rules for certain philanthropic business holdings, and the third is a bill sponsored by Senator Dan Coats (R-IN) that requires the IRS to give nonprofit organizations advance notice if their 501(c)(3) status is in jeopardy. You may recall that ACR wrote a letter of support for the Coats bill last June.

Finance Committee Chairman Orrin Hatch (R-UT) said he plans to hold similar markups “in the near future,” though he has not identified another block of bills to advance in the same way. Hatch also noted that any bill the committee would take up in this context must “have bipartisan support and be non-controversial to both sides.”

Tax Reform Talk Continues

On February 13, House Ways and Means Committee Chairman Paul Ryan (R-WI) told reporters that tax reform must be “done by summer,” otherwise it will be difficult to move. He also said he favors comprehensive tax reform over business-only reform, but added that he is “open” to doing it in phases. According to Ryan, business tax reform could be the bulk of “phase one” of the process, and “phase two” could be to “finish the job of comprehensive tax reform” further down the road.

Across the Capitol, a spokeswoman for Chairman Hatch said that the committee is continuing to look at tax reform through the small working groups unveiled last month. The working groups are expected to begin holding roundtables in mid-April. Chairman Hatch said recently that he believes “there is real momentum to get something done on tax reform this year if we remain committed…And, believe me, I’m committed.” He added that the committee will begin tax reform efforts with the business side of the code: “We’re going to go forward with [tax reform], but we’re going to start on the business tax [side] first since [the President] requested that,” he said. He did not provide an exact timeline for action.

Lastly, the Senate Finance Committee held a hearing on February 10 featuring former Chairman Bob Packwood (R-OR) and former committee member Bill Bradley (D-NJ) to discuss lessons Congress can learn from the comprehensive Tax Reform Act of 1986. Both Packwood and Bradley attributed their success to a commitment towards bipartisanship and the pursuit of comprehensive reform as opposed to strictly corporate tax reform. They also stressed the importance of leadership from the White House.

ACR Summit

You are invited to the sixth annual ACR Summit for Leaders.


With so many tax issues still to be debated, nothing is completely on or off the table. Now is not the time for the philanthropic community to stay on the sidelines. We hope you will join us at the 2015 ACR Summit for Leaders to learn what we can do to protect private giving and educate lawmakers about the critical role of charitable organizations in a free society.

Registration: To register for the ACR Summit as well as other events during Philanthropy Week in Washington, click here. Attendance is free.

Consider This: What is the end game?

Washington is officially exhausted after having Congress in town for the last six weeks. What does Congress have to show for it?

In the tax world, there has been an excess of activity without clear and coordinated goals over the last month and a half. The House has been passing bills making various tax provisions permanent, but those bills aren’t likely to be taken up by the Senate. Meanwhile, House Republican Ways and Means members had a retreat to talk about taxes in general and tax reform specifically. As far as we can tell, they did not really return with a plan.

On the Senate side, the Finance Committee is plowing ahead on tax reform. The committee has divvied up the work into five areas and is hoping to make recommendations by Memorial Day. In a hearing last week, two of the key architects of the last big tax reform effort in 1986, Senators Packwood (R-OR) and Bradley (D-NJ) testified. When asked what is really needed to get tax reform across the finish line, Senator Packwood said a President that leans in to the effort. Senator Bradley told the committee that if the members cannot come to some agreement on raising or not raising revenue, they are never going to get anywhere and should spend their time doing something else. If those two things are true, the committee may be working toward, but never really getting to, the desired end result of reform. All signs point to reform not being high on the President’s list of priorities and there is no real agreement on whether tax reform should or should not be revenue neutral.

We don’t really know how all of this will shake out. With Republicans in control of both the House and Senate, we thought we’d see a little more coordination on the tax front. We certainly think they feel pressure to get something done to prove they’ve earned their majority. All of that may still come to pass. However, for now the end game is murky. We expect a clearer sense of where all of this is going by Memorial Day and we will be sure to keep you updated.


Top Reads

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