News and other Legislative items of interest to the planned giving professional.

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LEGISLATIVE UPDATE
Barbara Worth

Executive Compensation Focus of New Charity Tax Form
Charities will face many changes in how they disclose information to the public with the debut of a new tax form to be filed with the Internal Revenue Service. Perhaps most significant is the focus on executive compensation.

On the new form 990, the IRS has standardized reporting to make salary comparison easier. The IRS is looking for far more information from charities with sophisticated compensation arrangements for executives and is requiring charities to provide information about the process they use to set compensation. Information from the W-2 forms used to report employee wages will be copied over to the 990. Additionally, the requirement will ensure that all charities use the same time period of a calendar year for reporting compensation. Instructions for the new 990 list 50 kinds of compensation from stock options to tuition assistance and sick pay and tell how each should be handled on the form.

Much of the new information required by the IRS appears on Schedule J, “Compensation Information”, which needs to be filled out by only a small group of charities including those that pay at least one employee more than $150.000 per year. The IRS can levy stiff fines on charity officials who receive salaries and or “perks” deemed to be inappropriate, as well as on trustees who authorize these arrangements.

The Chronicle of Philanthropy, October 2, 2008, p.10

Senate Passes Charity Tax Provision Along with Wall Street Bailout
By a vote of 93-2, the US Senate attached a package of tax benefits to the bailout bill that would extend the measure allowing donors ager 70 ½ or older to transfer up to $100,000 to charity from their individual retirement accounts (IRA’s) for the next two years, without payment of income taxes on the money. This legislation would renew the provision retroactive to January 1, 2008 and extend it to the end of 2009.

This legislation also creates tax incentives for charitable giving to help victims of storms, tornadoes and floods in the Midwest.

http://philanthropy.com/news/government/5885/
The Chronicle of Philanthropy, October 2, 2008

Compromise Bill Would Raise Vehicle Rates
Two groups of senators with competing bills have agreed to compromise to better their chance of passing legislation that would increase the tax deduction for people who use their vehicles as part of their volunteer work. Under current federal law, volunteers who drive their cars for charitable purposes can deduct 14 cents per mile for their vehicle costs, as opposed to 58.5 cents per mile for business and 27 cents for medical or moving. The new compromise bill (S 3532), written by Senators Cardin, MD, D and Schumer, NY, D, would permanently raise the mileage deduction for volunteers to 70 percent of the IRS rate for business use of a vehicle. The IRS could set the rate as high or higher than the business rate but no lower than the rate set for medical and moving expenses.

The Chronicle of Philanthropy, October 2, 2008, p. 56


IRS Releases Details on College Probe
The Internal Revenue Service released details of a 42-page questionnaire it is sending to about 400 colleges to collect data on their executive compensation, endowments and outside business income. This questionnaire will examine how colleges pay their presidents and other top executives, including “perks.” It will also investigate how small, medium and large institutions report income and losses on business activities that may be taxable and also how they manage and spend their endowments. The survey results will be used to identify how higher education institutions are currently reporting financial data and if gaps in information need to be filled in.

The Chronicle of Philanthropy, October 2, 2008, p.56
http://philanthropy.com/news/government/5877/irs-releases-details-on-college-probe

Key Senate Aide on Nonprofit Issue Resigns
Dean A. Zerbe, senior counsel to Sen. Charles E. Grassley, IA ,R and a key Congressional figure in the passage of the 2006 law that tightened several rules governing charities and created new tax incentives to encourage charitable gifts plans to leave Congress for the private sector this February. In addition to helping pass the Pension Protection Act in 2006, which instituted new curbs on nonprofit activities as well as new opportunities for giving, Mr. Zerbe also assisted in Sen. Grassley’s numerous investigations of charity abuses.

http://philanthropy.com/news/updates/index.php?id+3818
The Chronicle of Philanthropy, January 2008

Charity Tax Incentives
Independent Sector, the coalition of major charities and foundations, has urged Congress to extend two tax incentives that help charities – one to encourage donations from individual retirement accounts (IRA’s) and the other to promote food donations—as a way to stimulate the economy.

http://philanthropy.com/nrews/government/
The Chronicle of Philanthropy, February 2008

 
   

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