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Thursday, February 09, 2006

President's Budget Includes Charitable Incentives
President Bush, in his FY07 budget proposal released on Monday, asked for $7.65 billion over ten years in tax incentives for charitable giving.

The incentives include an IRA charitable rollover proposal.

The President’s IRA rollover proposal would allow people over the age of 65 to donate money from qualifying individual retirement accounts to charity without penalty. This differs from the IRA rollover provision included in S. 2020 — a person must be age 70 ½ to take advantage of the Senate-passed provision.

As for charitable reform, the President’s budget calls for the imposition of penalties on charities that fail to enforce conservation easements. There are no other charitable reform provisions affecting foundations in the FY07 budget.

Posted by Jennifer Lowe, 04:56:14 PM

Tuesday, February 07, 2006

Tax Reconcilliation Conference Moves Forward
The House and Senate are hoping to get everything done to begin a conference committee on tax reconciliation legislation. A motion to go to conference on the bill is slated for House floor action Wednesday. House action on the tax reconciliation bill will clear the way for the Senate to appoint its own slate of conferees. Senate rules allow for 10 hours of debate, which could begin as early as Wednesday but will likely be subject to votes Thursday. Staffers have expressed a desire to wrap up the conference before the Presidents' Day break that begins Feb. 17, but it is speculated it is unlikely given the substantial differences between House and Senate versions of the bill.

The American Bar Assoc. sent a letter to Sen. Charles Grassley (R-IA) and Sen. Max Baucus (D-MT).

Posted by Jennifer Lowe, 11:24:29 AM

UWA Drops Nonitemizer Report, As Groups Galvanize to Oppose It
United Way released a report yesterday detailing the benefits of the nonitemizer.

According to United Way, the proposed nonitemizer deduction in the Senate tax reconciliation bill (formerly S. 2020, now incorporated in H.R. 4297) could increase charitable giving to United Way alone by a net $180 million a year.

In a news release, United Way said that while the proposed deduction can be expected to cause a $62 million drop in giving by itemizing taxpayers--who would face a $210 floor for the first time--the amount of those willing to give to United Way because of the new deduction is expected to rise to $242 million--for a positive effect overall.

Opponents of the provision fear that the provision would be a major shift by Congress away from the tax policy that grants taxpayers full credit for their support of charities. On Jan. 20, a group of more than 60 charitable organizations sent a letter to House and Senate tax committees urging them to drop the nonitemizer.

The groups, which include the Association of Direct Response Fundraising Counsel and the North Shore Animal League, pointed out that, under the Senate proposal, before an individual can take a charitable contribution deduction, they must exceed the floor and can only deduct the amount in excess of the floor. The organizations believe that they will end up losing donors. They argued that $420 is a considerable sum of money and the provision could cause itemizing donors to give less, since the tax incentive would be reduced.

Posted by Jennifer Lowe, 11:15:30 AM

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