Washington Snapshot - November 21, 2014
Washington Snapshot will be on break next week for Thanksgiving, returning on December 5. We wish all of our readers a very happy holiday!
Tell Congress: Pass America Gives More Act with Lame Duck Extenders Bill!
Congress has only two work weeks remaining in the year, so now is the time to speak out on the America Gives More Act (H.R. 4719). Let’s push this bill over the finish line!
The America Gives More Act is the most significant bill for the charitable sector in years. The bill has already passed the House and the Senate has signaled strong support for several of its provisions. This means we have a genuine opportunity to get lawmakers to include the bill in the tax extenders package expected to be enacted before the end of the year.
Join Your Colleagues in Speaking Out
How can you push your lawmakers on the America Gives More Act provisions? Taking action can be as simple as sending an e-mail to your lawmakers asking for their support for the bill. The Council has created a short handout on the Act, along with sample e-mail language to send to your lawmakers:
Dear [Representative or Senator last name]:
I strongly urge you to support the charitable tax provisions in the America Gives More Act (H.R. 4719) and to ensure that this bill is included in any year-end tax legislation.
The America Gives More Act (H.R. 4719), passed by the House in July, includes several tax provisions that are critically important to foundations and nonprofits. In the past, Congress has extended certain giving incentives on an annual basis each year, creating tremendous uncertainty for nonprofits and donors. These giving incentives are popular and proven effective, and should be made permanent law.
The IRA charitable rollover encourages individuals to donate retirement account assets directly to a public charity without incurring a tax liability on the donation. Rollover donations help countless public charities to fulfill their charitable purposes in your communities.
The enhanced deduction for donations of food inventory allows individuals or businesses to receive an increased tax deduction when they donate food to charities that serve those who are most in need.
The enhanced deduction for land conservation easement donations helps landowners afford to choose conservation over development of some of our country’s richest and most scenic land.
The America Gives More Act also simplifies the private foundation excise tax to a single rate. This measure will lift an administrative burden that creates a perverse incentive for private foundations to give less, not more, in times of need.
On behalf of the [foundation name], I urge you to voice your support for the America Gives More Act. Your community depends upon it.
Sincerely,
[name and position]
You can look up e-mail addresses for Representatives and Senators at these links. In addition, you can find your current lawmakers’ Twitter handles here.
For organizations concerned about navigating the legal rules of advocacy, check out our advocacy guide or contact our Legal Affairs team at legal@cof.org.
For general questions on advocacy, contact Policy Analyst Katherine LaBeau.
Tax Extender Negotiations
House and Senate leaders must now negotiate which of the 55 expired tax extender provisions get reinstated. As our readers know, the House passed all of the charitable tax extenders in the America Gives More Act, and the Senate included them in their EXPIRE Act. This is a strong indication that these charitable provisions will be included in the final negotiated package.
Yet, House and Senate leaders still differ on whether to renew all of the extenders or just some, and whether to renew them for 1 year, 2 years, or permanently. And, the Senate bill does not include the private foundation excise tax simplification or extension of the giving deadline until April 15.
The House—with retiring Ways and Means Chairman Dave Camp (R-MI-4) leading the charge—would like to permanently renew a smaller portion of the extenders. Meanwhile, Senate leaders seem included to renew all of the 55 provisions for a limited time period, and then consider which to make permanent down the road.
In outgoing Senate Finance Chairman Ron Wyden’s (D-OR) words, “The reason you do comprehensive, bipartisan tax reform is that’s the place where you put the spotlight on each and every one of these provisions . . . you can’t do that in the space of 11 days.”
The Council's Position
We want these provisions to become permanent law this year to create certainty for donors and foundations alike—it’s critical that foundations urge their lawmakers to include the permanent charitable provisions in the America Gives More Act in any tax extenders package they consider during the last few weeks of the year!
Sector unites Around America Gives More Act
Within the past week, several letters have been sent to the House and Senate urging passage of a tax extenders bill as soon as possible. The Council has signed onto these letters in a collaborative effort to ensure that Congress hears from many voices within the field.
A broad and diverse group of 528 associations, nonprofits, and coalitions—including the Council—signed a letter to the House and Senate asking each body to “work together to extend seamlessly, enhance, or make permanent these important tax provisions this year to provide a necessary bridge to comprehensive tax reform.”
The Council also signed onto a letter that includes our colleagues National Council of Nonprofits, Feeding America, the Forum of Regional Associations of Grantmakers, the Land Trust Alliance, and Independent Sector, that was sent to congressional leadership this week. The co-signers told congressional leaders, “[w]e feel strongly – as do millions of nonprofit volunteers, board members, staff members, donors, and individuals served – that the important tax provisions in that legislation would provide essential tools that charitable nonprofits and foundations need to fulfill their missions and have greater impacts in the communities they serve.”
Our colleagues at Independent Sector circulated an open letter, which the Council signed, to all members of Congress urging their support for the America Gives More Act. The letter emphasizes why it is critical to pass the charitable tax extenders into permanent law: “for each day that goes by without an incentive in place and assured, many of the gifts the incentives were intended to promote will simply not take place. The time to plan and execute the gifts will have already passed by.”
News from the Hill
Ryan Takes Ways and Means Gavel
As we have been anticipating, Congressman Paul Ryan (R-WI-1) will be the new chair of the House Ways and Means Committee when the 114th Congress begins in January. Ryan was set to face Congressman Kevin Brady (R-TX-8) who outranked him in seniority on the Committee, in a competition for the chairmanship, but Brady dropped out of the race on Tuesday.
Speaking about his new chairmanship, Ryan said: “We will work together to fix the tax code, hold the IRS accountable, strengthen Medicare and Social Security, repair the safety net, promote job-creating trade agreements, and determine how best to repeal and replace Obamacare with patient-centered solutions.” Ryan will take over for retiring Chairman Dave Camp (R-MI-4).
It is still unclear how Ryan will incorporate Chairman Camp’s tax reform discussion draft into his own plans for reform, but it will no doubt set a critical precedent for any tax reform drafts that are considered in the next Congress.
House Democrats Re-Elect Leaders
There were no surprises on Tuesday when the House Democratic Caucus re-elected their leadership for the 114th Congress. Representative Nancy Pelosi (D-CA-12) will again serve as House Minority Leader and Representative Steny Hoyer (D-MD-5) will repeat his tenure as the Minority Whip. As POLITICO reported, “Pelosi was unopposed in the election and earned broad support from the Democratic Caucus despite grumbling from some lawmakers that Democrats needed a new message to excite voters after a devastating Election Day loss.”
One new addition to the Democrats’ leadership team is Congressman Ben Ray Luján (D-NM-3), who will chair the Democratic Congressional Campaign Committee, the group in charge of getting more Democrats elected to seats in the House in upcoming election years.
Louisiana Senate Race
While the 113th Congress has returned to session for the last time, there is still one race that is undecided for the 114th Congress—Louisiana—which will hold a runoff election in December to determine the winner. Democratic incumbent Mary Landrieu is fighting for her seat against Republican challenger Bill Cassidy. Senator Landrieu hoped that securing Senate passage of the controversial Keystone XL pipeline would help her win over voters in her state, where new jobs would be created. However, Landrieu fell one vote short of passing the bill in the Senate on Tuesday, a political disappointment that could negatively impact her chances in the runoff election.
Executive Action on Immigration
Yesterday, President Obama introduced an Executive Order to allow undocumented foreign workers who have lived in the U.S. for at least 5 years to apply for a work visa. This executive action sparked outrage among some Republicans in Congress, which could set the tone for relations between Congress and the White House when the new Republican-controlled Congress takes office in January.
Now, Congress has just 9 legislative days remaining in the lame duck session to pass a government funding bill, to consider supplemental funding for the Ebola outbreak and the campaign against ISIS, to vote yes or no on numerous judicial and political nominees, to extend the Terrorism Risk Insurance Act, and most significantly for foundations—to pass a tax extenders package.
Trending in Legal Affairs
International Grants: IRS Guidance on Ebola Outbreak
Because we know many of our members make grants outside the United States and have donors concerned with crises overseas, the Legal Affairs team is committed to keeping our members current on IRS rules and incentives for gifts made abroad.
In response to the deadly Ebola outbreak in Guinea, Liberia and Sierra Leone, the IRS released guidance this week (IR-2014-102) on two items. The first concerns leave-based donation programs to aid those who have suffered from Ebola in those countries. The second designates the outbreak as a “qualified disaster,” allowing individuals to exclude qualified disaster relief payments from their gross income.
Under Notice 2014-68, a donation made by an employer on behalf of an employee donations made by to a § 170(c) organization in exchange for vacation, sick or personal leave, will not be treated as income. The payments must be made to a charitable organization for the relief of victims in the three countries and be paid before January 1, 2016. The IRS created similar programs for donations made in the aftermath of Hurricane Sandy and Hurricane Katrina.
The qualified-disaster guidance, Notice 2014-65, designates the outbreak in Guinea, Liberia and Sierra Leone as a “qualified disaster” under IRC § 139. This allows recipients of qualified relief payments to exclude those payments from income on their tax returns. This announcement follows similar steps taken after other disasters, such as the Japan earthquake and tsunami.
We remind all Council members that the Legal Affairs team is an important resource that may help with both the day-to-day and the big, confounding issues that come your way. In future issues of Washington Snapshot, we’ll continue to cover legal questions that are trending among our members. In the meantime, don’t hesitate to reach out to us at legal@cof.org.
Snapshot Winter Holiday Dates
Washington Snapshot will be taking a break for the holiday season the weeks of November 28, December 26, and January 2.
