Tuesday, July 2, 2013

Senate Finance Committee Paper on Exempt Organizations

As part of its ongoing series on tax reform options, the Senate Finance Committee recently published a paper on Tax-Exempt Organizations and Charitable Giving.  The report lists and briefly discusses many of the reforms for the sector that have been proposed at numerous hearings, in scholarly articles, in policy and commission papers, and by various lawmakers.  It focuses on four broad areas:

    Fundamental changes to the deduction, such as repealing it outright, replacing it with a credit, or limiting it via a cap or a floor. 

    Incremental changes to the deduction; for example, repealing the percentage limits or tightening the rules for contributions of conservation easements.

    Commercial activity, such as taxing all such activity or requiring organizations that engage in fee-for-service activities to provide some amount of free or reduced-cost services;

    and the proper treatment of political activity and lobbying; for example by requiring disclosure of the amount of such activity, capping such activity, or eliminating the 501(c)(4) category. 

The changes mentioned above are only a fraction of the proposals listed in the paper, which provides a very nice listing of most of the major reform options that have been seriously discussed in the last ten or so years.  Although many of the proposals in the paper are familiar to readers of this blog, what is particularly useful about this report is that it contains links to primary sources discussing each of these reforms, such as to hearing testimony, news articles, commission reports, scholarly articles, and other studies that propose or discuss a given reform.  To that end, the paper is a great resource for anyone wanting to review exempt organization reform proposals.



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