July 10, 2007
Lawmakers to Review Charity Issues at Capitol Hill Hearing
By Peter Panepento
Washington
Nonprofit leaders will have a chance to urge members of Congress to extend several key tax breaks for donors and offer their views on information that charities must disclose to the Internal Revenue Service at a July 24 hearing of the House Ways and Means Oversight Subcommittee.
The subcommittee, which is chaired by U.S. Rep. John Lewis, a Democrat from Georgia, has jurisdiction over federal tax policy. As a result, it helps set the agenda for many of the key issues that affect the operations of nonprofit organizations.
Committee officials say the hearing will focus on the Pension Protection Act of 2006 — which includes numerous measures to encourage donors to give — as well as the IRS’s proposal last month to overhaul the Form 990 informational return. In addition, the hearing will review the activities of the Internal Revenue Service’s office that oversees tax-exempt groups.
The subcommittee has invited representatives from the IRS and the U.S. Government Accountability Office to give their views at the hearing. It has also asked Independent Sector, a coalition of nonprofit groups and foundations, and the Council on Foundations, which represents many grant makers, to offer comments.
Independent Sector and the Council on Foundations have been pushing Congress to expand some of the tax incentives that were included in the Pension Protection Act.
Both organizations support legislation that would extend a provision that allows donors to give money from their individual retirement accounts beyond its expiration date in December, remove the current $100,000 annual limit on donations, expand the types of groups that can receive such funds, and allow donors to make contributions beginning at age 59½.
The current law limits the incentive to those older than 70½ and does not allow donors to steer IRA money to foundations or donor-advised funds. Donors who give money to charity benefit financially because they don’t pay any taxes or penalties on the amount they distribute from the IRA account.
The groups have also been vocal about changes to the IRS Form 990 that would require nonprofit organizations to disclose more information about their financial operations to the public.
The committee will not open the floor to other witnesses at the July 24 hearing, but it will allow other people who would like to offer testimony to submit written statements.
The hearing is the first of two expected hearings by the Ways and Means Committee on tax-exempt groups.
Karen McAfee, a tax lawyer for the committee, has said the committee plans to play host to a second hearing that would focus more specifically on the services that urban and rural organizations provide.
The July 24 hearing is also the first regarding tax-exempt organizations under the leadership of Rep. Charles B. Rangel, a New York Democrat who became the chairman of the Ways and Means Committee in January.
Details on how to submit comments to the Ways and Means Committee regarding tax-exempt organizations are available at the committee’s Web site.
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I would hope that anyone representing the nonprofit community would make it clear to the Committee that we come in all sizes and shapes and that a single policy (tax or regulatory) does not fit all the same way.
It is clear by having such a limited hearing that comprehensive review of the policies and regulations adopted in the Pension Protection Act of 2006 is not contemplated. It is important that those individuals speaking on behalf of the sector to urge the House Committee to undertake a comprehensive and democratically inclusive review of the impact the Act has on agencies of all sizes and shapes.
— John C McGee Jul 11, 03:02 PM #