Latest News / "Word on Washington"
Extenders clear Senate committee hurdle (22 July 2015)
The Senate Finance Committee voted yesterday to renew a set of temporary tax breaks for the 2015 and 2016 tax years, including three charitable giving incentives that expired on January 1. While lawmakers filed a number of amendments to make permanent or expand certain provisions, including the charity-related ones, Chairman Orrin Hatch (R-UT) asked to postpone discussions of permanency for a later date in order to avoid a contentious markup. The $95.2 billion package as adopted included $1.8 billion in offsets.

Senate tax reform reports released (9 Jul 2015)
Senate Finance Committee leaders yesterday published the reports submitted by its five bipartisan working groups, created in January 2015 to examine broad areas of the tax code. Few, if any, new ideas emerged from the process, with lawmakers drawing primarily from existing proposals, as well as concepts developed during the House Ways and Means Committee’s own working group process in 2013. The groups largely declined to endorse any specific proposals and instead offered options for the committee’s consideration as it pursues comprehensive tax reform. Absent from any of the reports were options to limit the charitable tax deduction for individuals or to modify the rules for the commercial activity of exempt organizations. The groups identified among possible tax-code changes the permanent reinstatement and expansion of three expired tax incentives for charitable giving, a simplified excise tax for private foundations' investments, mandatory e-filing of the Form 990, and the expanded availability of court judgments for all groups seeking tax exemption under Section 501(c). Learn more

White House seeks more overtime pay for employees, nonprofits included
(30 Jun 2015)
The White House plans to release proposed regulations this Thursday that would require employers -- including nonprofits and exempt organizations -- to pay time-and-a-half wages to salaried employees earning up to $50,440 annually when they work more than 40 hours in a given week. The plan would more than double the current overtime-exemption threshold of $23,660, and would ensure future thresholds remain at the 40th percentile of income. While the proposal will maintain the current carve-out for all teachers, attorneys, doctors, and judges, the Administration will ask for public input about whether to alter the current “duties test” that allows employers to waive overtime pay for “executive, administrative, and professional” employees. Learn more

IS urges Congress to provide adequate funding for IRS
(29 May 2015)
Independent Sector sent a letter today to the leaders of the House and Senate Appropriations Committees requesting that the IRS receive adequate funding for Fiscal Year 2016, so that it may fulfill its enforcement and administrative functions over the exempt sector. The IRS budget has been cut by 18 percent since 2010, which has weakened the agency’s ability to enforce and administer the nation's tax laws on behalf of the public it serves. IS also believes self-policing and ethical governance are crucial to preserving the integrity and public trust of the sector, as outlined in our 33 Principles for Good Governance.

IRS: Uncertain timeline for expanded political activity rules
(12 May 2015)
An IRS official said recently that it remains too early to determine when the agency might produce a second draft of proposed guidance for tax-exempt political activity. After withdrawing last year a proposal from 2013 that pertained only to the political activity of 501(c)(4) social welfare organizations, the IRS had planned to release a more comprehensive set of rules for all exempt groups during the first quarter of 2015, a deadline it did not meet. Learn more

IS coalition submits comments to Senate tax reform groups
(15 April 2015)
A number of IS members joined Independent Sector in submitting official comments yesterday to the Senate Finance Committee’s tax reform working groups, focused on respective changes to the taxation of individuals and the business operations of exempt organizations. These comments underscore Independent Sector’s public policy priorities to preserve and enhance tax incentives for charitable giving, as well as to promote the full breadth of community impact carried out by the charitable and philanthropic sector. The five newly-formed groups invited stakeholder input through April 15, as they each work towards making bipartisan policy recommendations to Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) by the end of May. Learn more

Charitable tax provisions pass House
(13 February 2015)
Yesterday, the House passed the America Gives More Act of 2015 (H.R. 644), with support from 39 Democrats and all but one Republican. The legislation would make permanent the IRA charitable rollover and the enhanced deductions for donations of food and land conservation easements, all of which expired on January 1, as well as simplify the excise tax rate on the investment income of private foundations. Repeating the objections expressed to two similar measures considered in 2014, opponents raised concerns with the $14.3 billion cost without budgetary offsets over ten years and the lack of consideration for other tax provisions that benefit working and middle-class families. While Senate tax-writers have begun a more deliberative process recently in the pursuit of a full tax-code rewrite, Finance Chairman Orrin Hatch (R-UT) acknowledged the need to address expired tax provisions known as extenders. Read the press statement | Learn more

Obama FY16 budget repeats cap on itemized deductions, restores land extender (3 February 2015)
President Obama released his non-binding $3.99 trillion budget proposal yesterday for Fiscal Year 2016, employing $1.8 trillion worth of deficit-reducing measures to replace automatic spending cuts known as sequestration. The plan repeats for the seventh year a 28-percent cap on certain itemized deductions, including the charitable deduction, for taxpayers in the top three tax brackets. Further, the base deduction limit on charitable contributions would remain at 50 percent for cash donations to public charities only, while the limit for all other types of donations would be simplified to 30 percent. The carry-forward period for contributions in excess of these limitations would increase from five to 15 years. Also repeated is the so-called Buffett Rule, which creates a 30-percent mandatory tax rate for individuals earning $1 million or more annually, excluding deductions for charitable contributions. The White House also renewed its proposal for the permanent extension of the enhanced deduction for certain land conservation easements that expired January 1. Learn more

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