Proposed Charity Act Would Promote Giving, Sponsors Say
Introduced last week in the Senate, the Charity Act would promote charitable giving, expand tax provisions for charitable donations, and simplify tax calculations for foundations.
New legislation, introduced in the Senate on April 6, would incentivize charitable giving and make it easier for foundations and other tax-exempt organizations to carry out their missions.
Called the Charities Helping Americans Regularly Throughout the Year (CHARITY) Act, the bill [PDF] builds on several charitable tax provisions signed into law late last year, including one that makes permanent a provision allowing taxpayers who are at least 70½ years old to make charitable donations directly from their IRAs. With the new expansion, those of eligible age would be able to also give directly to donor-advised funds from their IRAs.
The bill, introduced by Sens. John Thune (R-SD) and Ron Wyden (D-OR), would also simplify how foundations are required to calculate taxes on investment income by converting the two-tier form into a flat 1 percent rate. And it would create a limited exception to the excess business holding tax rules for philanthropic entities wishing to donate profits to charity.
“As families from across the country open their hearts and wallets to help less-fortunate members of our community, Congress should make it as easy as possible for charities to fulfill their purpose,” Thune said. “There’s more we can do in Washington to encourage Americans to participate in charitable activities, and that starts with ensuring our tax code doesn’t hamstring those who wish to give.”
The bill would promote transparency by requiring nonprofits to file their returns electronically and would demonstrate that promoting charitable giving as part of comprehensive tax reform is a priority for the Senate.