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Tax Extenders
TAKE ACTION: Tell Congress to act on the provisions in H.R. 4719 before the end of 2014

House approves five charitable provisions
On Thursday, July 17, the House of Representatives passed by 277-130 the America Gives More Act (H.R. 4719), a package of five charitable provisions that includes making permanent three expired tax extenders: the IRA charitable rollover, the enhanced deduction for donating land conservation easements, and the enhanced and expanded deduction for donating food inventory. Also included is a measure to extend through April 15 the deadline for claiming charitable donations on the previous year's tax filing and a measure to simplify to 1 percent the excise tax rate for private foundations' investment income.

The vote comes the same week that more than 850 organizations joined Independent Sector in a letter to House lawmakers, urging them to support permanent reinstatement of the charitable extenders.

See the list of signers | See the ad in Roll Call | View our 2014 Action Guide on Extenders

The Issue
A number of critical giving incentives that are often included as part of the annual "tax extenders" package were extended in January 2012 for two years, retroactive to 2012 and through 2013. Without legislative action, however, these extenders expired January 1, 2014. Charitable giving incentives include:

LATEST NEWS
House Ways and Means would make permanent charitable extenders
On May 29, the House Ways and Means Committee approved on party line votes individual bills which would reinstate and make permanent three charitable giving tax incentives: the enhanced deduction for donating food inventory, the enhanced deduction for donating land conservation easements, and the IRA charitable rollover. The latter two provisions would also become retroactive to December 31, 2013. During the same markup, the Committee approved bills to extend the deadline through April 15 for making charitable contributions, and to reduce the excise tax for foundation investment income. Independent Sector and 252 organizations sent a letter to the panel two days prior to the markup, urging them to extend permanently the three charitable giving incentives.

Senate Finance moves to renew charitable extenders
The Senate Finance Committee passed by voice vote April 3, 2014 the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act (S.2260), which extends through 2015 all three charitable tax extenders: the IRA charitable rollover and the enhanced deductions for donations of food inventory and land conservation easements. It is unclear when or whether the extenders package will reach the Senate floor.

Extenders expire with new year
The package of 55 tax extenders, including the IRA charitable rollover and the enhanced deductions for donations of food inventory and land conservation easements, expired January 1, 2014 despite a last-minute effort by Senate Democrats. The Congressional Research Service (CRS) published a report at the end of 2013 that estimated the total cost over ten years for the reinstatement of these three charitable extenders to be $1.9 billion.

IS Position
Because the IRA rollover and other incentives have come under close scrutiny, Independent Sector is working closely with our members and will support coalitions to make the case for bringing greater certainty to these powerful giving tools.

  • An Op-Ed by IS President and CEO Diana Aviv was published in the March 27, 2012 edition of Roll Call, urging the reinstatement of the expired individual and corporate charitable giving incentives.
  • Independent Sector sent a letter to members of the Finance Committee, including Chairman Max Baucus (D-MT), ranking member Orrin Hatch (R-UT) urging the reinstatement of the charitable provisions as soon as possible. IS has also signed onto a broader tax coalition letter sent to every member of Congress urging quick legislative action to restore the expired tax provisions.
  • Independent Sector also submitted a statement for the record in support of permanently reinstating these giving incentives for the April 26, 2012 House Ways and Means Select Revenue Measures Subcommittee Hearing on extenders.
  • Independent Sector organized a sector-wide letter that was sent to all U.S. Senate offices in February 2014, in support of legislation to renew and enhance the expired IRA charitable rollover provision. Nearly 500 organizations from across the country signed on.

Background
The set of 55 tax provisions that regularly expire and are reinstated are known collectively as "tax extenders." The package includes three charitable giving incentives: the IRA charitable rollover, the enhanced charitable deduction for food inventory, and the enhanced charitable deduction for land conservation.

After expiring at the end of 2011, the American Taxpayer Relief Act of 2012 (ATRA) extended through 2013 and retroactively through 2012 all three of these charitable tax extenders, as well as the basis adjustment to stock of S corporations making charitable contributions of property.

The language for the ATRA deal was taken in part from a slimmed down extenders package approved by the Senate Finance Committee on August 2, 2012. The Family and Business Tax Cut Certainty Act of 2012 would reinstate all three charitable extenders through 2013 and extend for two years a provision that allows tax-exempt organizations to exclude certain payments from their business income if the payment from a controlled entity is less than fair market value. This package did not include the now-expired enhanced deductions for books and computer equipment. Senate Finance Committee Chairman Max Baucus (D-MT) and Finance Committee ranking member Orrin Hatch (R-UT) said that the newly streamlined package would allow roughly 25 percent of the current tax provisions to expire.

Some lawmakers in the House have signaled a preference to defer to Ways and Means Committee Chairman Dave Camp's (R-MI) comprehensive tax reform efforts for renewal of their preferred extenders. A lack of legislative action in 2013, however, allowed all extenders to expire on January 1, 2014. Some members of the tax-writing committees hope that eagerness to renew the popular provisions can be leveraged to garner support for a comprehensive tax reform package in the future.

Resources

CRS report: Tax Provisions Expiring in 2013 (December 2013)

JCT report: "Legislative Background of Selected Federal Tax Provisions Scheduled to Expire in 2011 or 2012" (April 2012)

IRA Charitable Rollover leave-behind

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