Two-Week Reprieve For Charitable Tax Provisions

December 17, 2014       Mark Hrywna      

Three charitable tax provisions were among the dozens included in a bill that passed the Senate last night that retroactively extended expired tax provisions through the end of this year.

The U.S. Senate approved the “Tax Increase Prevention Act of 2014” (H.R. 5771) last night by a vote of 76-16 (with eight senators not voting). Nay votes came from both parties, with eight Democrats and eight Republicans, while those not voting were composed of one Independent, one Democrat and six Republicans.

Introduced on Dec. 1 by House Ways and Means Chairman Dave Camp (R-Mich.), the measure approves through 2014 some 55 tax extenders that had expired Dec. 31, 2013, including three key charitable provisions: the IRA charitable rollover, deductions for conservation easement contributions and gifts of food inventory. The bill — which passed the House on Dec. 3 by a vote of 378-46 — is expected to be signed by President Barack Obama.

Nonprofits advocates on The Hill last week had pushed to get the three charitable tax extenders made permanent as part of a separate bill. Obama had threatened to veto a bill and the House was unable to muster enough support last week for a procedural vote to move the legislation forward.

Jewish Federations of North America welcomed yesterday’s vote but expressed disappointment that lawmakers have yet to pass a permanent solution that would provide greater certainty for taxpayers and charities that depending tax-free distributions from individual retirement accounts (IRA) to bolster fundraising.
“Although we are grateful that the Senate has renewed the IRA Charitable Rollover for 2014, the time has come to make this important giving incentive a permanent part of the tax code,” said William Daroff, senior vice president for public policy and director of the Washington, D.C. office for Jewish federations. “We hope that the next Congress will be able to come together to provide this much needed long-term fix,” he said.

The current IRA charitable rollover was enacted as part of the Pension Protection Act of 2006, expiring on Dec. 31, 2013. Individuals age 70 ½ and older can make annual tax-free gifts up to $100,000 directly from their IRA to eligible public charities. Jewish federations have estimated receiving nearly $40 million from IRA charitable rollovers.