The nonpartisan Treasury Inspector General for Tax Administration (TIGTA) released its audit report today detailing the events surrounding the IRS's mishandling of 501(c)(4) applications for exempt status.
Read the TIGTA report | View the IS timeline of events
Independent Sector seeks member input on proposed changes to CFC (14 May 2013)
The Office of Personnel Management (OPM) on April 8 published a proposed rule to amend the Combined Federal Campaign (CFC) program, the nation’s largest workplace charity campaign. The proposed changes are based on recommendations from an internal commission charged with finding ways to streamline and improve the program, and there are changes which would affect both participating charities and donors. Independent Sector is preparing a submission to be filed with OPM before the deadline for public comments, and is seeking input from members that may feel an impact from these changes to the CFC program. The deadline for submitting comments to Independent Sector is May 27. IS members may get additional information or provide input by contacting Sarah Perz at sarahp@independentsector.org or 202-467-6170. | Learn more.
IRS admits targeting conservative groups (13 May 2013)
IRS Exempt Organizations Division Director Lois Lerner apologized before a convening of the American Bar Association Friday on behalf of the agency’s “absolutely wrong and inappropriate” actions in pursuing predominately tea party-affiliated organizations applying for 501(c)(4) status between 2010 and 2012. Accusations of IRS discrimination erupted last year, with the IRS denying the charges until now. In a statement, Lerner explained the alleged overstep as a function of poor planning in the face of an unexpected increase in the volume of 501(c)(4) applications, rather than an intentional policy of discrimination. House Ways and Means Committee Chairman Dave Camp (R-MI) announced the committee will hold a hearing on the issue in the near future.
Lawmakers seek public comment on tax reform via website (10 May 2013)
Senate Finance Committee Chairman Max Baucus (D-MT) and House Ways and Means Committee Chairman Dave Camp (R-MI), announced the launch of a new website yesterday to solicit input from the American public regarding tax reform. The website, TaxReform.gov, asks users to share their stories and ideas with the chairmen, both of whom have made comprehensive tax reform a priority in their final terms as leaders of the tax-writing committees. Baucus announced his retirement from Congress in April; Camp is term-limited in his post as chairman under House Republican Conference rules. Operating in tandem with the website is a Twitter handle, @simplertaxes, with the account name listed as “Max & Dave."
The Joint Committee on Taxation (JCT) released a report summarizing the findings of the 11 tax reform working groups created by the House Ways and Means Committee in February. For each working group topic, including the Charitable and Exempt Organizations working group, the document outlines present tax law and catalogues the public comments submitted to the Committee. The report also includes summaries of select tax reform proposals from various commissions, organizations, and lawmakers. The report begins by summarizing tax law for the charitable and exempt organizations and later outlines feedback to the Committee on many issues of importance to the sector, including the charitable deduction, unrelated business income tax (UBIT), tax-exempt status, and the IRA charitable rollover. Read the JCT report
New Bowles-Simpson deficit reduction plan released (19 April 2013)
The leaders of President Obama’s 2010 fiscal commission on deficit reduction, Erskine Bowles and Alan Simpson, released a new bipartisan budget plan that would reduce the deficit by $5.2 trillion over ten years, 2.5 trillion beyond the $2.7 trillion in deficit reduction already on the books. The plan calls for raising $585 billion through tax reform, urging lawmakers to repeal all itemized deductions and lower tax rates by 2014, and then gradually add back those deductions deemed necessary, including the charitable deduction, which would be converted to a flat 12 percent credit with a floor of 2 percent of adjusted gross income. Should tax reform efforts fail by the deadline, the authors propose a “failsafe” that automatically reduces all deductions and exclusions to about 27 percent, claiming that the back-up plan would generate $575 billion over ten years in revenue from income over $150,000 per year. Read the summary here. | Read the full text.
Independent Sector submitted comments to the House Ways and Means Committee tax reform working group on Charitable and Exempt Organizations April 15, 2013. Read the comments here.
President releases FY 2014 budget proposal (10 April 2013)
President Obama has released his fiscal year 2014 budget proposal to Congress. The $3.77 trillion budget plan includes a mixture of revenue increases
and spending cuts, as well as investments in education, job creation,
and infrastructure. The budget would replace the $1.2 trillion in automatic sequestration spending cuts with $1.8 trillion in alternative deficit reduction. As part of this deficit reduction plan, for the fifth consecutive year, the budget proposes capping itemized deductions, including the charitable deduction, on income above $250,000 for joint-filing taxpayers. The budget also proposes implementing the so-called Buffett Rule and would return the federal estate tax to 2009 levels. Learn more.
Senate passes FY 2014 budget resolution (23 March 2013)
The Senate has passed its FY 2014 budget resolution. The budget blueprint, which
includes over $900 billion in new revenue from reducing or eliminating tax
breaks for wealthy Americans and large corporations, would reduce the deficit
by $1.85 billion over ten years. Learn more.
House Budget passes FY 2014 budget resolution (21 March 2013)
The House has passed its fiscal
year 2014 budget resolution. The measure outlines a plan to reduce the
deficit by $4.6 trillion over the
next ten years in part by extending the discretionary spending caps set
by the
Budget Control Act of 2011 for two additional years, leaving the
sequester's $1.2 trillion in deficit savings in
place, repealing the Affordable Care Act, and implementing other
reforms. Learn more.
Ways and Means Committee holds hearing on charitable giving (14 February 2013)
Diana Aviv, president and CEO of Independent Sector, and several leaders
of IS member organizations joined more than 40 nonprofit and
philanthropic leaders to testify February 14 about the importance of the
charitable deduction. More on the charitable deduction | Read Diana Aviv's written testimony
The Joint Committee on Taxation has released its annual analysis of tax expenditures. The report, which examines tax expenditures scheduled for 2012-2017, estimates that households earning more than $200,000 year were responsible for over half of the $37.6 billion in foregone revenue from claiming the charitable tax deduction in 2012. The report also includes a summary and projected impact on expenditures of the tax changes included in the recently passed American Taxpayer Relief Act.
