In This Week's Edition of Snapshot…
- Possible Retirement Overhaul
- Bill to Redesign the IRS Clears Committee
- Donor Advised Funds Bill Introduced in California
- 2020 Census One Year Out – States Prepare While Lawsuits Rage
Last Friday, Reps. Richard Neal (D-MA) and Kevin Brady (R-TX), the Chairman and Ranking Member of the House Ways and Means Committee, introduced The Setting Every Community Up for Retirement Enhancement (SECURE) Act (H.R. 1994). The committee unanimously approved H.R.1994 after a compromise was struck by House tax writers over the taxation of some IRA distributions
Senators Chuck Grassley (R-AI) and Ron Wyden (D-OR), the Chairman and Ranking Member of the Senate Finance Committee, also introduced the Retirement Enhancement and Savings Act of 2019 (S. 972) this week.
Both versions would make it easier for small companies to offer their employees retirement plans, and for part-time workers to guarantee themselves an annual income after retirement. The measure would also repeal the age cap for contributing to individual retirement accounts, currently capped at 70½ years old.
Despite the similarities, the bills contain differences that must be ironed out. For example, the House version would increase the age at which owners of tax-deferred retirement accounts are required to start withdrawing from those accounts to 72 from 70½. That provision isn’t in the Senate legislation.
Last week, the Chairman and the Ranking Member of the House Ways and Means Committee, Reps. Richard Neal (D-MA) and Kevin Brady (R-TX), and Oversight Subcommittee Chairman Rep. John Lewis (D-GA), introduced the Taxpayer First Act of 2019 (H.R.1957). This bipartisan, bicameral legislation would redesign the Internal Revenue Service (IRS) to better serve taxpayers.
Among its provisions are new limits for private debt collectors that have contracts with the IRS. The language would restrict them from going after those whose income largely comes from supplemental security income benefits or disability insurance, or who have an annual income of 200 percent of the applicable poverty level or less.
In addition, the measure would create an independent appeals process for taxpayers as a customer-service improvement. It also includes new protections for victims of tax return identity theft; would let the IRS boost its information technology staff by authorizing a faster-than-normal hiring process that the agency has previously used; and directs IRS brass to come up with a reorganization plan to make recommendations to Congress.
On Tuesday, the bill cleared the House committee with a unanimous vote. The bill’s long-term prospects are less clear, since a way forward in the Senate has yet to emerge.
The IRS Commissioner Charles Rettig will testify next week on April 10 before the Senate Finance Committee. This will be Rettig's first appearance before a Congressional tax committee since this tax season began and is just his second showing before Finance since the panel confirmed his nomination last summer. The hearing is at 10:15 a.m. in 215 Dirksen Senate Office Building.
A bill (AB-1712) regarding Donor Advised Funds (DAFs) was introduced in the California Assembly on February 22, by Assembly Member Buffy Wicks (D-Oakland). This legislation is co-sponsored by CalNonprofits, Kat Taylor, and NextGen America. This bill would require the state Attorney General to develop regulations related to donor advised funds, including, but not limited to the disclosure of a dormant or inactive policy at a DAFs sponsor and the types of investments made by the DAFs sponsor related to a DAFs. The bill has been read, amended, re-read, and re-referred to the Judiciary Committee.
The Council on Foundations is monitoring the developments related to this bill and will continue to provide information to our members.
Exclusive from our colleagues at the National Council of Nonprofits.
The constitutionally mandated decennial census is one year away, and state lawmakers are taking action to prepare even as the debate rages over what will and will not be asked as part of the census. The stakes are high in communities across the country: for every person who is not counted, states stand to lose between $533 to $2,309 annually in federal funds. Six state legislatures have created Complete Count Committees (CCC) via legislation to help with planning for the census and five states have similar bills pending. Additionally, 15 governors have signed executive orders creating state-level Complete Count Committees or ordering CCC campaigns. The Lieutenant Governor of Connecticut joined those governors to establish a CCC this year for the Constitution State.
California lawmakers have put a high priority on the census by allocating more than $90 million in state funds for outreach, education, administrative costs, and the State Census program. Appropriators in five other states have added $6 million for state census activities since 2017, and seven more state legislatures are considering measures to provide up to $102.2 million to assist efforts this year. Pending legislation in Colorado would create an outreach grant program in the Department of Local Affairs to provide grants to local governments, intergovernmental agencies, councils, housing authorities, school districts, and nonprofit organizations. An Illinois measure would issue matching grants to local governments and nonprofit organizations to support a fair, accurate, and complete count.
While planning and funding are expanding, the census questionnaire that hundreds of millions of residents will be asked to fill out has not yet been finalized. This important detail will be resolved in the coming months when the U.S. Supreme Court rules on whether or not to allow the addition of a citizenship question to the 2020 Census, as sought by the Administration. The question is proving to be extremely controversial. Alexandria, Virginia, was one of 190 cities, counties, and state and local officials that filed a brief to challenge the inclusion of the question. According to an Alexandria City Councilmember, “The addition of an unnecessary citizenship question will deter responses and result in inaccurate census data that diverts hundreds of millions of dollars away from vital public programs and infrastructure here and around the country.”
The National Council of Nonprofits, joined by the National Human Services Assembly and YWCA USA, also filed an amici curiae brief in the case urging the Supreme Court to reject the citizenship question, pointing out that charitable nonprofits “have several compelling interests in [the] case, including the threatened loss of billions of dollars in federal funding and threatened loss of reliable data nonprofit organizations need to make informed, effective operational decisions in the communities they serve during the next decade.” The Court is expected to announce a decision by early summer.