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CFC rules advance despite charity concerns (16 April 2014)
The Office of Personnel Management (OPM) issued a final rule April 11 that would significantly alter the workplace giving program for federal employees around the country without making many changes based on the concerns expressed by the charitable community during a June 2013 public comment period. Under the new regulations, administration of the Combined Federal Campaign (CFC) program will transfer from scores of local committees to a handful of centralized offices, which many in the charitable community contend will result in decreased donations due to a lack of personal connection for donors. Other changes include the creation of a nonrefundable application fee for participating charities and the elimination of cash donations. OPM Director Katherine Archuleta wrote in a blog post that the changes will maximize the percent of each dollar going directly to charity, and that OPM remains “fully committed” to working with stakeholders during the implementation process. Learn more

Congress passes pension flexibility bill for charities (25 March 2014) The Senate and House approved a measure (H.R.4275) today that would provide certain charities relief in funding and administering their pension plans by maintaining a soon-to-expire exemption from some requirements under the Pension Protection Act (PPA) of 2006. The legislation will allow these charities the flexibility to remain excluded from the PPA permanently, or voluntarily elect to be under the PPA structure. The Senate had passed a similar bill (S.1302) by unanimous consent in January. Learn more

President’s FY15 budget released (4 March 2014)
Released today, President Obama’s $3.9 trillion budget proposal for fiscal year 2015 adheres to the spending levels Congress hammered out in December 2013, expands the Earned Income Tax Credit, and abandons the use of Chained CPI. Included is a $56 billion package beyond December’s budget deal, which addresses in equal parts domestic and defense spending initiatives. For the sixth year in a row, the president’s plan includes a 28-percent cap on certain itemized deductions, including the charitable deduction, for taxpayers in the top three tax brackets. Also repeated is the so-called Buffett Rule, which creates a 30-percent mandatory tax rate for individuals earning $1 million or more annually, except for charitable deductions, which are taxed at 28-percent. New to the budget blueprint this year is the permanent extension of the land conservation easement tax extender that expired January 1, 2014, while the other two charitable extenders were excluded. Learn more

Independent Sector submits comments to IRS
(27 February 2014)
A diverse group of more than 100 organizations signed onto Independent Sector’s comments on the proposed regulations for 501(c)(4) political activity, which were submitted to the IRS at the end of the public comment period on February 27, 2014. Over 140,000 comments were sent to the IRS, the vast majority of which expressed concerns about the proposal. The same day, IS President and CEO Diana Aviv voiced the concerns of the charitable sector in a Congressional hearing focused on the proposed regulations. For more, read a press release with highlights and a link to the full testimony.

Camp unveils tax code rework (27 February 2014)
After convening over 30 hearings on the topic during his tenure, House Ways and Means Committee Chairman Dave Camp (R-MI) unveiled a discussion draft of a comprehensive tax reform plan yesterday that would bring major changes for both individual and corporate taxpayers. Dubbed the Tax Reform Act of 2014, the nearly 1,000-page proposal stipulates two tax brackets for individuals at 10 and 25 percent, with a 10 percent surtax for certain income over $400,000, and places the maximum corporate tax rate at 25 percent. According to Chairman Camp, the proposed system would allow 95 percent of taxpayers to avoid itemizing, and instead claim a larger standard deduction. Within the plan are several provisions that would impact charitable giving, such as a two-percent floor for claiming the charitable deduction and an extended deadline for making deductible donations -- through April 15. Beyond charitable giving, the plan proposes changes to the tax code that would alter the administration, reporting, and monitoring of exempt organizations. Camp stressed the bipartisan nature of the bill, citing inclusion of measures developed during the working group process in May 2013 and by his Committee colleagues, such as mandatory e-filing of the Form 990 information return for exempt organizations and the permanent reinstatement of certain land conservation easements. Learn more about tax reform

Omnibus clears the Senate with sharp cuts to IRS (17 January 2014)
Lawmakers agreed to a nearly 1,600-page spending bill yesterday, which allocates funds to every government agency through September 30, the end of fiscal year 2014. The legislation adheres to the $1.012 trillion funding level stipulated in the December budget agreement and includes several policy riders. Senate Appropriations Committee Chairwoman Barbara Mikulski (D-MD) explained that “we realized that we could be at a stalemate with policy riders and some we were able to compromise and in others we just said ‘Give up yours and we’ll give up ours.’” As part of the $11.3 billion allocated to the IRS, representing a 4.4 percent decrease from fiscal year 2013, $92 million is designated for improving the agency’s taxpayer services and increasing compliance. The legislation includes language explicitly prohibiting the IRS from using funds “to target groups for regulatory scrutiny based on their ideological beliefs or to target citizens for exercising their First Amendment rights.” IRS Commissioner John Koskinen previously called his agency’s shrinking budget one of the greatest challenges he will face during his term.

IS raises concerns with IRS proposal for 501(c)(4) political activity (04 December 2013)
Independent Sector President and CEO Diana Aviv joined Bauman Foundation Executive Director Gary Bass today in criticizing the recent IRS proposal to limit the political activities of 501(c)(4) social welfare organizations. While they applaud the agency for addressing this important topic, they point to a range of flaws that could severely undermine the critical role nonprofits play in encouraging democratic participation during election season and otherwise. As an alternative to the IRS plan, Aviv and Bass endorse a set of rules developed by the Bright Lines Project, which provides a predictable system for nonprofits appropriately involved in political activities, while protecting free speech and preventing abuse. “It’s important that all nonprofits rally now to tell the IRS to adopt the ideas the legal experts shaped,” they write, “and drop a proposal that creates too many problems and solves none.” Learn more
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