Update on Republican Blueprint for Tax Reform
In June 2016, House Republicans unveiled a blueprint for tax reform. This week, they released a new video to promote and explain the plan. Barbara Angus, chief tax counsel for the majority on the House Ways and Means Committee, stated they were working to introduce legislative language early next year. She also reaffirmed their commitment to moving the tax reform blueprint as a complete package.
To learn more about the blueprint, click here.
Council Submits Letter to Treasury on Forthcoming DAF Regulations
The Council’s policy and legal team attends public meetings and engages in regular conversations with the Department of Treasury and IRS about trending topics in the field and areas of tax-exempt law that our members would benefit from clarification.
From attending public meetings on this issue and speaking with senior officials in these agencies, we know that the Treasury and IRS are working to develop regulations pertaining to donor advised funds (DAFs) that further clarify the Pension Protection Act of 2006.
In addition to our ongoing dialogue, the Council met last week with senior officials to deliver a letter outlining the potential negative implications that such regulations could have on the sector’s ability to strengthen communities through philanthropy. Specifically, we note the legitimate reasons for:
- Why a small private foundation may seek to convert to a DAF or supporting organization so that resources that would otherwise go toward administration can instead be put toward grantmaking;
- Why a private foundation would partner with a community foundation in grantmaking through a DAF to take advantage of its local and community expertise for addressing particular issues;
- Why a private foundation would work with a community foundation when additional local oversight is needed for grant dollars.
The Council remains deeply engaged on this issue, and will provide updates as soon as they are available. If you have any questions or would like to discuss this further, please do not hesitate to contact our team at firstname.lastname@example.org.
HUD Proposes New Elevation Requirements in Flood Prone Communities
The Department of Housing and Urban Development (HUD) this week proposed new rules for properties seeking HUD assistance or Federal Housing Administration mortgage insurance. Newly built homes and businesses, and those undergoing significant remodels, will be subject to increased elevation requirements to be eligible for HUD financing. The rule is being proposed “in the face of increased flooding risks and rising sea levels.” Building resilient infrastructure has become a key strategy for communities bracing for the effects of climate change, and philanthropy has been an important stakeholder in those conversations.
This year alone, the U.S. has experienced two "once-in-a-thousand-year floods," several 500-year events with 38 Presidentially declared major disasters. The proposed rule now enters a public comment period through December 27, 2016.
News from Around the Globe
New Updates on China's Overseas NGO Law and Conference Call This Week
Earlier this year, the Chinese government passed an Overseas NGO Management Law, which will go into effect on January 1, 2017. Since the new law's adoption, funders working in China have waited for guidance on its implementation from the Chinese government's new regulator of external NGOs and foundations working in China.
The Ministry of Public Security has now released a draft of the planned implementing guidelines which addresse issues like organizational registration in China and new reporting requirements for temporary activities. Many questions remain around implementation, and the International Center for Not-for-Profit Law will host a conference call this week to discuss the draft with foundations and non-profits.
We hope our members funding organizations in China will join the call to learn more about the released draft guidelines. We'll also post a summary of the guidelines and key concerns for funders on www.cof.org in the upcoming weeks, following this call and as we gain more information.
You can find a summary and recording of our previous conference call with ICNL on the Chinese Overseas NGO Management Law on the Council website.
Halloween Edition: Exorcising Expenditure Responsibility
In this week’s edition of Trending in Legal Affairs, the legal team explains expenditure responsibility.
To read more from this Halloween story, click here.
For more information on this or any other tricky legal matters, please contact the Council’s Legal Affairs Team at email@example.com.
Access to the Council’s legal team is a valuable member benefit. Council attorneys are available to discuss your legal questions and to provide legal information by telephone, email and through our various publications and newsletters. This information is intended for educational purposes and does not create an attorney-client relationship. The information is not a substitute for expert legal, tax or other professional advice tailored to your specific circumstances, and may not be relied upon for the purposes of avoiding any penalties that may be imposed under the Internal Revenue Code.
New Report Examines Charitable Deduction for Non-itemizers
This week, the Urban Institute released a report called, The New Debate over a Charitable Deduction for Nonitemizers. The report explores how making the charitable deduction available to all taxpayers—as opposed to only the 25% of taxpayers who currently itemize their returns—would impact both charitable giving and the administration and enforcement of laws and regulations governing the tax-exempt sector.
The key takeaways are that such a deduction would likely increase charitable giving, but without some parameters, the foregone revenue to the U.S. Department of Treasury and Internal Revenue Service (IRS) from this tax deduction could be detrimental to these entities’ ability to track and enforce matters related to this proposal. To solve for this, the report suggests implementing a floor—or minimum dollar amount threshold—for which a non-itemizer must exceed in order to take advantage of this deduction.