1 / 34

Washington Update

Washington Update. Presenter: Andrew Schulz Vice President, Legal and Government Relations Council on Foundations. 2010 – the year in review. 2010 Issues: IRA Rollover. CoF Position: Expand to DAFs, SOs, and PFs Make permanent Result: No expansion Extended for two years (2010 - 2011)

oakley
Download Presentation

Washington Update

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Washington Update Presenter: Andrew SchulzVice President, Legal and Government RelationsCouncil on Foundations

  2. 2010 – the year in review

  3. 2010 Issues: IRA Rollover • CoF Position: • Expand to DAFs, SOs, and PFs • Make permanent • Result: • No expansion • Extended for two years (2010 - 2011) • Same limits (70½ and older, $100,000/taxpayer) • Distribution by 1/31/11 may be treated as12/31/10 • No recapture of RMD if already taken 

  4. 2010 Issues: PF Excise Tax • CoF Position: • Replace two-tier rate (2%/1%) with a flat 1.39% rate (JCT Revenue-neutral number) • Result: • Not Achieved

  5. 2010 Issues: Estate Tax • CoF Position: • Reinstate an Estate Tax • No specific position on rates and exemption levels • Result: • Reinstated for 3 years (2010 – 2012) • 35 % top rate • Exemption: $5 million / $10 million for couples • Retroactive – but can elect for 2010 law treatment 

  6. 2010 Issues: Deduction Rates • CoF Position: • Maintain current law on charitable deduction rates • WH has proposed capping deduction for people in the upper tax brackets • Result: • No change in law 

  7. 112th Congress

  8. 2010 Election Results

  9. 112th Congressional Leadership U.S. House of Representatives Speaker of the House John Boehner (R-Ohio 8) Majority Leader Eric Cantor (R-Va. 7) Majority Whip Kevin McCarthy (R-Calif. 22) Minority Leader Nancy Pelosi (D-Calif. 8) Minority Whip Steny Hoyer (D-Md. 5) Assistant Minority Leader Jim Clyburn (D-S.C. 6) U.S. Senate Majority Leader Harry Reid (D-Nev.) Majority Whip Dick Durbin (D-Ill.) Minority Leader Mitch McConnell (R-Ky. ) Minority Whip Jon Kyl (R-Ariz.)

  10. The Players • House Ways and Means • Dave Camp (Mich. 4), Chairman • Sandy Levin (Mich. 12), Ranking Member • Senate Finance Committee • Max Baucus (Mont.), Chairman • Orrin G. Hatch (Utah), Ranking Member • House Ways and Means Subcommittee on Oversight • Rep. Charles Boustany, chairman

  11. Outlook for the 112th Congress • The Republican majority in the House have indicated that they will pursue three main initiatives: • Repealing the new health care bill • Reducing the budget deficit • Making government smaller • House Ways and Means Chairman, Dave Camp (R-Mich.) recently • said that he sees a “unique opportunity” to overhaul the nation’s tax • system in the next two years. The Committee hosted a hearing, the • first in a series, focusing on the federal income tax last week.

  12. 2011 Compromise

  13. Debt and Deficits • National Commission on Fiscal Responsibility and Reform • Recommends eliminating all “tax expenditures”, including all itemized deductions • “Simplify key provisions to promote work, homes, health, charity, and savings while increasing or maintaining progressivity” • Eliminate all tax expenditures for business – lower rates

  14. Gang of Six • Plan announced next week? • “Don’t tie our work to debt ceiling debate” • Members • Senator Saxby Chambliss (R-GA) • Senator Tom Coburn (R-OK) • Senator Kent Conrad (D-ND) • Senator Mike Crapo (R-ID) • Senator Richard Durbin (D-IL) • Senator Mark Warner (D-VA)

  15. Hearings, hearings, hearings • SFC – March 30, 2011 • How Do Complexity, Uncertainty and Other Factors Impact Responses to Tax Incentives? • Senator Thune noted that by incentivizing private giving, the charitable deduction reduces the burden on government (and taxpayers) • JCT – April 6, 2011 • Gephardt and Baker urge bipartisanship • Suggest charitable deduction “off limits” • More coming, SFC aide said yesterday

  16. Legislative Agenda for the 112th Congress • Issues: • Expand and Extend the IRA Rollover • Simplify Private Foundation Excise Tax • Promote Rural Philanthropy • Promote the Charitable Sector

  17. IRA Charitable Rollover • CoF Position: • Expand to DAFs, SOs, and PFs • Make permanent • Legislative Status: • Extended for two years (2010 – 2011) • Public Good IR Rollover Act of 2011 (S. 557) (March 10, 2011) • Currently has 9 co-sponsors • Extends the IRA charitable rollover beyond 2011 • Expand to allow gifts made to DAFs, Sos, and PFs to qualify for the incentive. • Lifts the $100,000 cap on distributions and allow planned gifts beginning at age 59 ½.

  18. Private Foundation Excise Tax • CoF Position: • Replace two-tier rate (2%/1%) with a flat 1.39% rate (JCT Revenue-neutral number) • Legislative Status: • S. 593 Introduced (March 16, 2011) • Currently has 12 co-sponsors • Removes the current two-tiered excise tax imposed on private foundations and replace it with one flat rate • Sets the excise tax rate at 1.39 percent/ • Applicable to tax years beginning after the date the bill is enacted • Obama Administration’s FY2012 budget proposal calls for a single, 1.35 percent excise-tax rate on investment income of private foundations. 

  19. Promote Rural Philanthropy • CoF Position: • Seeks investment of existing federal resources through the creation of a program within the US Department of Agriculture to provide challenge grants and capacity building grants to build rural endowments to benefit economically distressed rural counties. • Legislative Status: • Rural Philanthropy Growth Act (RPGA) • Provide challenge grants to qualifying community foundations to build community-based unrestricted endowment funds to benefit one or more economically distressed counties. • Provide capacity-building grants to qualifying community foundations. • Strategies: • Encourage USDA to implement via internal initiative; • Introduce stand-alone legislation; and/or, • Insert intent language via amendment into the farm bill or other appropriate vehicle.

  20. Promote the Charitable Sector • CoF Position: • Maintain current law on charitable deduction rates • WH has proposed capping deduction for people in the upper tax brackets • President Obama’s fiscal 2012 budget outline • Caps deduction rate at 28% - regardless of tax rate (would raise revenues by $321.9 billion over 10 years) • Applies to all itemized deductions – not just charitable contributions • Increased recent pressure on “tax expenditures”

  21. Be Informed in Public Policy E-Updates from Washington , D.C.

  22. Foundations are sometimes concerned that any communication with policy-makers will be viewed as lobbying; however, that is not the case. “A Foundation’s Guide to Advocacy”outlines the differences between networking and lobbying and provides information to help foundations navigate the policy world. Purchase Your Copy at: www.cof.org/publicpolicy

  23. Regulatory news

  24. CF Audits Update • Still planning 100 audits • Approximately 30 underway or complete • Most that have closed are yielding no findings • Confirms what we already know – CF’s are well run and Standards are a big part of that • Hopefully this will be the last such effort for some time

  25. Repository • COF proposed revisions to Rev. Proc. 92-94 would allow an approved organization to issue determinations that foreign NGOs are the equivalent of US public charities. • Private foundations and donor advised funds would be able to rely on the determinations. • Improve quality of decision making • Reduce overhead • Enable more foundations to give internationally

  26. Other Matters • Final regulations on foreign bank account reporting make clear that reporting is not required for investments in offshore hedge and similar funds • Congress has repealed new requirements for 1099 reporting of payments to corporations • Still awaiting Treasury study of private foundations, donor advised funds and supporting organizations – due August 2007

  27. ABA on Simplification • Private Foundation Excise Tax • Repeal section 514 • Repository Project • PRI modernization

  28. IRS Examinations • Political Activity • International Grants • Alternative Investments • Huge Foundations?

  29. IRS “to do” list • Treasury study of DAFs • Report on IRS compliance checks? • Regulations • Public support test • Supporting organizations • Donor advised funds

  30. Q & A

  31. COF Legal and Public Policy • Janne Gallagher janne.gallagher@cof.org or 703-879-0711 • Maya Harris maya.harris@cof.org or 703-879-0714 • Dan Rader dan.rader@cof.org or 703-879-0719 • Kelly Simone kelly.simone@cof.org or 703-879-0716 • Kristy Tsadick kristy.tsadick@cof.org or 703-879-0718 • Andrew Schulz andrew.schulz@cof.org or 703-879-0715 • Chatrane Birbal cbirbal@cof.org or 703-879-0689 • Hal McCabe darren.mccabe@cof.org or 703-879-0712 Legal Public Policy

More Related