Ways and Means Committee Chair Releases Tax Plan

Wednesday, February 26, 2014
Arlington, VA

This afternoon Congressman Dave Camp (R-MI-4), Chairman of the House Ways and Means Committee, released a comprehensive plan to reform the individual and corporate tax codes. Find details of the proposed bill here:

Executive Summary

Summary of Bill

Legislative Language

Joint Committee on Taxation Explanations and Revenue Estimates

Since there are several provisions of interest to our members in this proposal, including changes to the charitable deduction, the private foundation excise tax, and donor advised funds, Council’s President and CEO Vikki Spruill released the following statement in response to the proposal:

“The Council on Foundations supports the goal of comprehensive tax reform and commends Chairman Camp for his continued efforts to move that process forward. We applaud the Chairman for his proposal to simplify the current private foundation excise tax by introducing a single rate of one percent. Our members have long supported simplifying the complex, two-tiered private foundation excise tax to a flat rate. We are also pleased to see that the Chairman’s plan would extend the deduction for charitable contributions to April 15th, ensuring that taxpayers have adequate time to make charitable donations and take advantage of the deduction.

"Among the Council’s concerns with the proposal, however, is the impact of the proposed floor on the charitable deduction, which would deny donors a deduction for the full value of their charitable gifts. As Congress considers how to best reform the tax code, the Council urges Members of Congress to ensure that proposed reforms do not impede the philanthropic sector’s efforts to serve the country.”

The Council’s team of policy and legal experts will continue to examine this proposal and the potential impact it could have on the charitable sector. We will provide additional analysis of the proposal in Friday’s edition of Washington Snapshot.

In the meantime, the Council’s policy and legal experts would like our members to note several proposed changes that may directly impact foundations:

  • 2 percent floor on the charitable deduction – The proposed floor would deny donors a deduction for the full value of their gifts to charity.
  • Private foundation excise tax simplified to a single rate of 1 percent –Council members have long supported simplifying this complex, two-tiered excise tax to a flat rate.
  • Mandatory Form 990 e-filing for all tax-exempt organizations –Small nonprofits and private foundations could face significant compliance costs associated with e-filing.
  • Extension of the charitable contribution deduction to April 15th of the calendar year – This provision would ensure that taxpayers have adequate time to make charitable donations and take advantage of the deduction.
  • Five year payout requirement for donor advised funds – Because of the potential implications for our community foundation members, the Council will continue to explore this provision and will provide additional details later this week.
  • Repeal of Type II and Type III supporting organizations – This proposal has the potential to restrict the flexibility of community foundations. The Council will continue to examine this provision closely and will provide additional details later this week.
  • Changes to the treatment of certain unrelated business income – The proposal contains numerous UBIT provisions that the Council continues to analyze.

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