News and analysis
December 10, 2014

Nonprofits Hold Out Hope for Tax Bill Despite Setbacks

Nonprofit advocates on the Hill kept their fingers crossed on Wednesday as Republican House leaders, facing opposition from Democrats, scrapped a vote on a series of tax benefits designed to help charities.

A vote is expected Thursday on the bill, which would permanently allow tax deductions on donations to food backs, land set-asides for conservation, and donations to charity from IRA retirement accounts.

Rep. Dave Camp (R-Mich.), chairman of the House tax-writing panel, plucked those items from a group of 55 temporary tax provisions that are usually extended on an annual basis. Congress has not yet passed those items, known as "tax extenders," for the current tax year.

Last month, a deal to extend all of the 55 provisions for one year as a group fell apart, prompting Mr. Camp to push for a charity-only bill.

House Democrats pledged to oppose the legislation Wednesday, and the Obama administration issued a veto threat.

Speaking on the House floor Wednesday evening, Democratic Rep. Sander Levin of Michigan accused Republicans of having a “double standard” by insisting on offsets to pay for an extension of unemployment insurance benefits and other spending in 2013, but not offering a way to offset the tax revenue that would be lost to the charity tax preferences.

The White House "strongly opposes" the bill because lawmakers have not offered a way to offset its tax-revenue losses, which would total $11.1-billion over 10 years.

Tim Delaney, president of the National Council of Nonprofits, said a deal that extends the benefits for the current tax year on the full slate of extenders is "useless" to his organization’s members. This late in the year, he said, people of age 70&frac; or older aren’t likely to be able to take advantage of the IRA "rollover" provisions that allow them to deduct from their income gifts to charity made from their retirement accounts. Similarly, the tax incentive for donations to food banks is also useless this late in the year, he said.

Mr. Delaney said he was frustrated by Democratic lawmaker’s preference for a one-year extension of the broader extender package. "It’s either ignorance or an insult," he said.

On Wednesday afternoon, a coalition of nonprofit organizations — including Delaney’s group, the Council on Foundations, Feeding America, Independent Sector, and the Land Trust Alliance — called on rank-and-file Democratic members to buck their leadership and vote for the bill. "The legislation’s impact on low-income Americans, underserved populations, communities of color, and the nation’s community food banks cannot be overstated," they wrote in a statement.

Members of the groups took to Twitter, using the hashtag #HR5806 — the bill’s assigned number — to promote the legislation.

If the House does pass the bill on Thursday, it is not clear whether the Senate would consider it before adjourning for the year. Lawmakers have made plans to leave Washington on Thursday, but Sue Santa, vice president for public policy at the Council on Foundations, said they may remain in session longer.

Ms. Santa said she and other coalition members want to remind lawmakers of the tens of thousands of charities across the country that help the poor and hungry in every congressional district.

"We hope that is what will drive a ‘yea’ vote on this measure," she said, "but we haven’t been operating under the assumption that this is a slam dunk."

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