Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Tuesday, December 10, 2013

The Problem With Government Giving

IRS-100wiDonors contributing to charities work hard to maximize the benefits provided by these donations to those in need. Unfortunately, the government does not. Because the government provides tax deductions for charitable contributions, the federal government pays part of the donation. As a result, these donations are costing the federal government almost $40 billion annually.

The problem is highlighted with three examples: 1. Non-profit hospitals receive the largest amount of donations, but they are hard to distinguish from for-profit hospitals. 2. Deductions for conservation easements were created to protect the environment, however, the requirements for establishing a conservation easement are very lenient. Private golf courses are a glaring example of this problem because they are also eligible for this tax deduction. 3. Private foundation investment accounts with no definite payout time line are also eligible for tax deductions. While there are simple legislative fixes for these problems, the last time Congress looked at these issues was in 1969. Stopping the wasteful charitable deductions is a good place to start to get the federal governments finances in order.

See Ray D. Madoff How The Government Gives, New York Times, Dec. 6, 2013.

http://lawprofessors.typepad.com/trusts_estates_prof/2013/12/go.html

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