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
|
