May 6, 2011

ACR newsletter (5.6.11)

Current Issue

Friday, May 6, 2011

The latest edition of the ACR newsletter is available below.

Washington Roundup


On Monday May 2nd, Congress ended a 2-week recess and returned to Washington following the stunning revelation of Osama bin Laden’s death.  Beyond that event, all eyes in D.C. are turning toward the impending debt ceiling debate. Treasury Secretary Tim Geithner sent an open letter to Congress outlining “extraordinary” steps the Treasury will use to stave off hitting the debt ceiling until August 2nd. In his letter, Secretary Geithner reiterated that a failure to raise the $14.3 trillion debt limit “would have a catastrophic economic impact that would be felt by every American.” The next few weeks will give us a better sense of how Congress plans to tackle this issue. In the meantime, here are two items we want to bring to your attention:

  • Outreach on the Charitable Deduction ACR has partnered with our colleagues in the Nonprofit Coalition to express concerns over Administration and Congressional proposals to limit the charitable deduction, among other itemized deductions. The Coalition’s meetings with Members of Congress are taking place on the heels of a letter to President Obama opposing his FY2012 budget proposal, which contained a cap on itemized deductions at 28%.

    Other groups are also raising interest in the issue. Independent Sector recently called on their membership to take action against threats to the charitable deduction. As we reported, both the Administration and several Members of Congress have called for eliminating or reducing itemized deductions for taxpayers that earn over $250,000, and recent committee hearings indicate that the charitable deduction continues to be in the spotlight.

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  • New Deficit/Tax Reform Proposals
    As you may recall, earlier this year the Peter G. Peterson Foundation granted $200,000 each to six think tanks to formulate plans for comprehensive deficit reduction. Those organizations include the Bipartisan Policy Center, the American Enterprise Institute, the Center for American Progress, the Economic Policy Institute, the Heritage Foundation, and the Roosevelt Institute Campus Network. The proposals must meet criteria laid out by the Foundation and are expected to include tax reform proposals. We believe the think tanks will unveil their plans as part of the Peterson Foundation’s Fiscal Summit on May 25th.  We will follow this roll-out closely and keep you updated on these, and other, tax reform developments.


Making Headlines

Here are recent headlines you may find interesting:

Federal
The charitable deduction continues to generate discussion on The Hill and across the country sectors:

4/27 Congress Wrangles Over Taxman’s Take in Talks on Diminishing U.S. Deficit, Bloomberg
Review of the issues Congress is facing following Easter recess.


State/Local
4/29 Some States Push for More Estate Taxes, Wall Street Journal
A finance columnist highlights a revenue–raising trend among some states: trimming estate tax exemptions.

4/28 Rahm Emanuel Warns Nonprofits Not Immune from Financial Sacrifice, Chicago Sun-Times
The Sun-Times reports comments made by Mayor-elect Emanuel signaling that nonprofits will not be immune from changes and sacrifice.

4/26 New York Plans Charity Law Reform to Cut Red Tape, Reuters
N.Y. Attorney General Eric Schneiderman announced plans to reform laws and regulations on the state’s charities in an effort to ease the compliance costs for nonprofits.

4/24 City Sends ‘Tax’ Bills to Major Nonprofits, Boston Globe
The Globe reports that the Mayor of Boston has asked 40 major nonprofits to make regular voluntary payments to the city (up to 25 percent of what they would owe if their property were not tax-exempt).


Studies/Reports
4/22 Nonprofits Pay Fees Despite Tax-Exempt Status, Survey Finds, PND News
A new report from Johns Hopkins University finds that 63 percent of respondents reported paying some kind of fee, tax, or payment in lieu of taxes (PILOT).

4/22 Americans Gave a Lot Less in the Recession Than Experts Predicted, Chronicle of Philanthropy
New IRS data reveals that Americans gave substantially less from 2008-2009 (the first two years of the recession) than was previously calculated by Giving USA.


Nonprofit Enforcement
The recent controversy over Greg Mortenson, founder of a charity to build schools in Afghanistan and writer of the book Three Cups of Tea which chronicles some of his work, has stirred debate over the need for greater nonprofit enforcement by government and provides lessons for all donors.

  • 4/27 Despite High-Profile ‘Three Cups’ Controversy, Nonprofit Fraud Isn’t Widespread, Chronicle of Philanthropy
  • 4/25 ‘Three Cups of Tea’ Scandal Offers Lessons for Charities and Trustees, Chronicle of Philanthropy
  • 4/20 Weak Enforcement of Rules on U.S. Charities: Experts, Reuters



    • Other
    4/29 No Good Deed Goes Unpunished: Gift to M.I.T. from Bose Founder Raises Tax Questions, New York Times
    Stephanie Strom reports on a recent gift to MIT from the founder of Bose, the high-end audio electronics company, and the questions it is raising from some nonprofit tax experts.

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