Will IRA Charitable Rollover Deduction be extended for 2014?

Published December 9, 2014

The following post from the Independent Sector gives us all the current news on the IRA Charitable Rollover Deduction and developments of the 113th Congress, as well as an excellent toolkit to use in contacting your federal representatives encouraging the passage of this bill.

UPDATE: Congress restores giving incentives for 2014 tax year
The Senate signed off on legislation (H.R. 5771) on December 16, 2014 to reinstate retroactively dozens of expired tax provisions, including the IRA charitable rollover and the enhanced deductions for donating land conservation easements and food inventory. While taxpayers will be able to employ these provisions in the upcoming filing season for the 2014 tax year, the package will expire again in roughly two-weeks’ time, on January 1, 2015. The House passed the measure on December 3 and the president signed it into law on December 19.

Tax Extenders

1,032 ORGANIZATIONS URGE LAME DUCK CONGRESS:
MAKE CHARITABLE GIVING INCENTIVES PERMANENT

During the current post-elections session of the 113th Congress, lawmakers are expected to address the package of nearly 55 expired tax provisions known as extenders, among which are three critical charitable giving incentives (see more below). For these provisions to be available to individuals and businesses in the tax filing season that begins in January 2015, the House and Senate will need to reconcile their differing approaches on the issue before the end of 2014, deciding whether to renew all extenders temporarily and/or make permanent only certain provisions. At the start of the lame duck session, Independent Sector, along with 1,031 organizations from across the charitable and philanthropic sector, sent a letter to all 535 Members of Congress, advocating for the permanent enactment of the charitable provisions in the America Gives More Act (H.R. 4719) in any year-end deal. On December 2, IS President and CEO Diana Aviv also joined with sector leaders to send a letter published in POLITICO to the President and leaders in Congress, urging them to pass the provisions in H.R. 4719.

THE ISSUE
A number of critical giving incentives that are often included as part of the annual “tax extenders” package were extended in January 2012 for two years, retroactive to 2012 and through 2013. Without legislative action, however, these extenders expired January 1, 2014. Charitable giving incentives include:

LATEST NEWS
House passes 1-year extenders bill On December 3, 2014 the House passed legislation (H.R. 5771) that would renew retroactively for 2014 the package of expired tax extenders, including three charitable giving incentives.

House passes permanent legislation for charitable giving incentives. In July 2014, the House passed the America Gives More Act (H.R. 4719), a package of five charitable provisions that includes making permanent three expired tax extenders: the IRA charitable rollover, the enhanced deduction for donating land conservation easements, and the enhanced and expanded deduction for donating food inventory. Also included is a measure to extend through April 15 the deadline for claiming charitable donations on the previous year’s tax filing and a measure to simplify to 1 percent the excise tax rate for private foundations’ investment income. The House Ways and Means Committee reported out this legislation following a May 29 markup.

Senate Finance moves to renew charitable extenders The Senate Finance Committee passed by voice vote April 3, 2014 the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act (S.2260), which extends through 2015 all three charitable tax extenders: the IRA charitable rollover and the enhanced deductions for donations of food inventory and land conservation easements. It is unclear when or whether the extenders package will reach the Senate floor.

IS POSITION AND ACTION
Because the IRA rollover and other incentives have come under close scrutiny, Independent Sector is working closely with our members and will support coalitions to make the case for bringing greater certainty to these powerful giving tools.

  • An Op-Ed by IS President and CEO Diana Aviv was published in the March 27, 2012 edition of Roll Call, urging the reinstatement of the expired individual and corporate charitable giving incentives.
  • Independent Sector sent a letter to members of the Finance Committee, including Chairman Max Baucus (D-MT), ranking member Orrin Hatch (R-UT) urging the reinstatement of the charitable provisions as soon as possible. IS has also signed onto a broader tax coalition letter sent to every member of Congress urging quick legislative action to restore the expired tax provisions.
  • Independent Sector also submitted a statement for the record in support of permanently reinstating these giving incentives for the April 26, 2012 House Ways and Means Select Revenue Measures Subcommittee Hearing on extenders.
  • Independent Sector organized a sector-wide letter that was sent to all U.S. Senate offices in February 2014, in support of legislation to renew and enhance the expired IRA charitable rollover provision. Nearly 500 organizations from across the country signed on.
  • Leading up to a markup in the House Ways and Means Committee, Independent Sector and 252 organizations sent a letter to the panel, urging them to extend permanently the three charitable extenders.
  • In advance of a House floor vote in July 2014, Independent Sector delivered another sign-on letter joined by over 850 organizations, as well as published a newspaper ad in Roll Call with the list of signers.

BACKGROUND
The set of 55 tax provisions that regularly expire and are reinstated are known collectively as “tax extenders.” The package includes three charitable giving incentives: the IRA charitable rollover, the enhanced charitable deduction for food inventory, and the enhanced charitable deduction for land conservation.

After expiring at the end of 2011, the American Taxpayer Relief Act of 2012 (ATRA) extended through 2013 and retroactively through 2012 all three of these charitable tax extenders, as well as the basis adjustment to stock of S corporations making charitable contributions of property.

The language for the ATRA deal was taken in part from a slimmed down extenders package approved by the Senate Finance Committee on August 2, 2012. The Family and Business Tax Cut Certainty Act of 2012 would reinstate all three charitable extenders through 2013 and extend for two years a provision that allows tax-exempt organizations to exclude certain payments from their business income if the payment from a controlled entity is less than fair market value. This package did not include the now-expired enhanced deductions for books and computer equipment. Senate Finance Committee Chairman Max Baucus (D-MT) and Finance Committee ranking member Orrin Hatch (R-UT) said that the newly streamlined package would allow roughly 25 percent of the current tax provisions to expire.

Some lawmakers in the House signaled a preference to defer to Ways and Means Committee Chairman Dave Camp’s (R-MI) comprehensive tax reform efforts for renewal of their preferred extenders. A lack of legislative action in 2013, however, allowed all extenders to expire on January 1, 2014.

Some members of the tax-writing committees hope that eagerness to renew the popular provisions can be leveraged to garner support for a comprehensive tax reform package in the future.

– See more at: http://www.independentsector.org/tax_extenders#sthash.rrNmeha8.dpuf