Want to stay up to date, but need the short version? We’ve got you covered! Here are the major federal policy updates from Washington, DC that may impact nonprofit work this month.
Unrelated Business Income Tax (UBIT)
The Treasury Department released guidance last month on how organizations can comply with the changes to UBIT while they await further clarity. Information provided stated, “There is no general statutory or regulatory definition defining what constitutes a ‘trade or business’ for purposes of the Internal Revenue Code.” It makes clear that in the interim period between when the Tax Cuts and Jobs Act (TCJA) passed and the issuance of final regulations in 2019, nonprofits may rely on a reasonable, good faith interpretation of the UBIT statutes in determining whether activities fall within the same “trade or business.” Learn more.
Everyday Philanthropist Act
Before August recess, Rep. Erik Paulson (R-MN) introduced the Everyday Philanthropist Act, HR 6616. This bill would allow employees at participating employers to donate up to $5,000 to their choice of pre-approved charities, pre-tax, through a flexible giving account. With some concerns around employee and organizational eligibility, anonymity, equity, and technical concerns, Independent Sector is actively engaging in conversations around the bill. Please reach out to us with comments.
This past weekend, the Department of Homeland Security (DHS) released its notice of proposed rulemaking on the anticipated public charge rule. For a century, the United States government has stated that immigrant families can seek health and nutrition benefits without fear of harming their immigration case. If the current proposal is finalized, this will no longer be the case – and may affect nonprofits’ ability to serve immigrants in their communities. You can learn more from the National Immigration Law Center and DHS.
Postage Cost for Nonprofits
In late August, the United States Postal Service (USPS) announced a proposal for new rules that would affect nonprofit postage rates. Any items that are considered merchandise or goods for marketing (this can include calendars, notepads, stickers, etc.) will now need to be mailed as First Class instead of the nonprofit rate. Comments to the USPS are being accepted until Monday, October 22 to ProductClassification@usps.gov.
Before August recess, the House of Representatives passed multiple appropriations bills, which contained language that would block enforcement of the Johnson Amendment for churches. The Senate version did not contain any anti-Johnson Amendment language. A conference committee has been attempting to reconcile these and numerous other differences between the bills, but has thus far been unsuccessful. At press time, the expectation was that Congress will pass a continuing resolution to keep these agencies open before resuming negotiations after the election. This could change at any moment, so please urge your legislators to fully protect the Johnson Amendment in any appropriations package.
Global Topics: Congress, Public Policy, Voices for Good
Policy Issues: Charitable Deduction, Charitable Giving, Donor Disclosure, Federal Budget & Fiscal Policy, IRS Oversight, Lobbying & Political Activity, Nonprofit Operations, Political Activity Rules, Tax & Fiscal Policy, UBIT