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Tax Extenders

The Issue
A number of critical giving incentives that are often included as part of the annual "tax extenders" package were reinstated for the 2014 tax year on December 17, 2014. Without legislative action, however, these extenders will expire again on January 1, 2015. Charitable giving incentives include:


LATEST NEWS

Congress restores giving incentives for 2014 tax year
The Senate signed off on legislation (H.R. 5771) on December 16, 2014 to reinstate retroactively dozens of expired tax provisions, including the IRA charitable rollover and the enhanced deductions for donating land conservation easements and food inventory. While taxpayers will be able to employ these provisions in the upcoming filing season for the 2014 tax year, the package will expire again in roughly two-weeks' time, on January 1, 2015. The House passed the measure on December 3 and the president plans to sign it into law in the coming days.

House fails to advance permanent bill for charitable giving incentives

On December 11, the House failed to advance the Supporting America's Charities Act (H.R. 5806), a bill that would have made permanent the IRA charitable rollover and the enhanced deductions for donations of land conservation easements and food inventory. The vote was 275 in favor and 149 opposed, just eight votes shy of the two-thirds supermajority needed under the expedited procedural rule used to consider the legislation.

IS POSITION AND ACTION
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.

  • In January 2012, Independent Sector sent a letter to Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) urging the reinstatement of the charitable provisions as soon as possible. IS also signed onto a broader tax coalition letter delivered to every Member of Congress that month.
  • In March 2012, an op-ed by IS President and CEO Diana Aviv was published in Roll Call. IS 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.
  • Leading up to a markup in the House Ways and Means Committee, Independent Sector and 252 organizations sent a letter to the panel, urging them to extend permanently the three charitable extenders.
  • In advance of a House floor vote in July 2014, Independent Sector delivered another sign-on letter joined by over 850 organizations, as well as published a newspaper ad in Roll Call with the list of signers.
  • Shortly after returning for a lame duck session in 2014, Independent Sector and 1,031 organizations sent a letter to every Member of Congress in support of making the charitable provisions permanent in any year-end deal. IS President and CEO Diana Aviv also joined with sector leaders to send a letter published in POLITICO to the President and leaders in Congress, on December 2.

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 these measures expired at the end of 2011, the American Taxpayer Relief Act of 2012 (ATRA) extended through 2013 and retroactively through 2012 all three of the charitable tax extenders, as well as the basis adjustment to stock of S corporations making charitable contributions of property. The package did not include previously available extenders that offered enhanced deductions for books and computer equipment.

In 2013, some lawmakers in the House signaled a preference to defer to former 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.

In 2014, lawmakers in both chambers advanced legislation to make permanent only certain tax extenders and extend others only temporarily. The Senate Finance Committee passed by voice vote in April the EXPIRE Act (S.2260), which would have renewed through 2015 the entire extenders package. The bill, however, failed to reach the Senate floor due to partisan disagreement over the amendment process. In July, the House passed the America Gives More Act (H.R. 4719), which would have restored permanently three charitable extenders as well as extended through April 15 the deadline for claiming charitable donations on the previous year's tax filing and simplified to 1 percent the excise tax rate for private foundations' investment income. The Senate did not take up the bill. In December, the House was unsuccessful in passing under suspension of the rules narrower legislation, the Supporting America's Charities Act (H.R. 5806), which would have made permanent only the three charitable extenders.

Unable to reach a longer-term agreement on extenders, the lame duck 113th Congress adopted legislation (H.R.5771) in December 2014 to extend the package of expired provisions, including three charitable giving incentives, retroactively for just the 2014 tax year. The provisions were set to expire again in two-weeks' time, on January 1, 2015.

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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