December 12, 2014

IRA Charitable Rollover Update

From the Council on Foundations

House Fails to Make Charitable Extenders Permanent

While this vote failed and the IRA charitable rollover has not yet been passed into law for 2014, there is still hope that the Senate will pass the 1-year retroactive extension passed a few weeks ago by the House. We will alert you if the bill passes.


The vote broke down along party lines, with 275 Members voting for the bill and 149 Democrats voting “no.” Some Democrats did break ranks, with 47 voting “yes.” Those who voted against the bill did so generally on two grounds. First, they argued that the provisions are not offset with spending cuts elsewhere. Second, they aligned with the White House, which threatened that the President would veto the bill. Ultimately, the bill failed to garner the two-thirds votes necessary to overcome procedural challenges.


In a Statement of Administration Policy, the White House emphasized that the Administration “supports measures that enhance non-profits, philanthropic organizations, and faith-based and other community organizations in their many roles, including as a safety net for those most in need, an economic engine for job creation, a tool for environmental conservation that encourages land protections for current and future generations, and an incubator of innovation to foster solutions to some of the Nation’s toughest challenges.” Yet, the White House said the President would veto H.R. 5806 if it came to his desk for a signature because the bill “would add $500 billion or more to deficits over the next ten years.”


Member Floor Statements Demonstrate Support for Charities

There is deep disappointment that this critical bill did not advance. However, despite the failure of the bill to pass, several House members expressed overwhelming support for the policies advanced by the charitable provisions in the Supporting America’s Charities Act.


In a passionate floor statement in support of the bill that he introduced, outgoing Ways and Means Chairman Dave Camp (R-MI-4) urged his colleagues to “support America’s charities and those that benefit from their work and make these policies permanent.” As the holiday season approaches and the year draws to a close, Camp told his colleagues, “now is not the time for those who so selflessly donate to wonder what tax surprises are waiting for them, no more than it is the time for charitable organizations to grow uncertain about their futures.”


Representative Jim Gerlach (R-PA-6), a co-sponsor of H.R. 5806, dismissed the notion that a 1-year extension of these provisions was enough. “That 1 year is 2014, the year we’re already in,” he said. “We only gave [nonprofits and donors] 21 more days of decision-making time — that is pitiful.”


On the Democratic side of the aisle, Ranking Ways and Means Committee Member Sander Levin (D-MI-9) explained that he was voting “no” because of the cost of the bill. “This is about fiscal responsibility and fiscal priorities,” he said on the House floor, emphasizing his strong support for charitable organizations and the underlying giving incentives in the bill. Other Democrats echoed Representative Levin’s concerns.


As we noted, the House previously passed a bill extending all 55 tax extenders — including the charitable provisions — for 1 year, retroactive for 2014. This bill, H.R. 5771, will likely now be taken up and voted on by the Senate. We will keep our supporters apprised of any Senate activity on the bill.