Legislation that would enhance charitable giving incentives and crack down on nonprofit abuses of the tax law is still pending in Congress, and the chance for passage this year remains uncertain.
With Congress in recess until early next week, Senate Finance Committee chairman Chuck Grassley (R-Iowa) and House Ways and Means chairman Bill Thomas (R-Calif.) continue to discuss whether the charitable giving incentives and reforms will move as part of a forthcoming tax "extenders" package.
Representative Thomas has said that some of the charitable provisions Senator Grassley supports—particularly some of the reforms—require further study and may not be ready to move anytime soon. Whether the extenders package includes charitable provisions or not, it is widely expected to include several other provisions that were pushed out of the final tax reconciliation bill, the Tax Relief Act of 2005 (H.R. 4297), signed into law on May 17, 2006.
In recent weeks, Senator Grassley and Representative Thomas have said the extenders package may move as part of pension reform legislation (H.R. 2830), which is currently in Senate-House conference negotiations.
Lawmakers are hopeful they can work out the differences between the Senate and House versions of the pension bill when they return from recess next week. If, however, agreement cannot be reached on the pension bill, Senator Grassley and Representative Thomas could try to attach the extenders package—which may or may not include the charitable provisions—to another bill.
As this process continues to unfold in Congress, key lawmakers and national nonprofits continue to debate the merits of the various charitable provisions under consideration. For example, several members of the House have circulated letters expressing concerns over several of the charitable reforms, particularly how they might affect smaller nonprofits. In contrast, last week more than 100 charities sent a letter to Congressional leaders supporting the full package of giving incentives and reforms in front of Senator Grassley and Representative Thomas.
Also last week, a House subcommittee held a hearing on charitable giving incentives where Representative Roy Blunt (R-MO.), the Majority Whip, urged Congress to move on several incentives this year, including a provision that would allow people age 70½ and older to withdraw money from their individual retirement accounts and donate it directly to charity without having to pay adverse tax consequences as well as a provision that would allow donors who do not itemize deductions on their tax returns to write off a portion of their charitable contributions. Representatives from Independent Sector and the Association of Fundraising Professionals also testified at the hearing and strongly endorsed these two incentives.
The Vivero Group is a Washington, D.C.-based government relations and communications firm representing GuideStar and other nonprofits on federal public policy issues. For more information, please visit www.viverogroup.com.