IRA Rollover, Foundation Excise Tax Introduced in CHARITY Act

Legislation recently introduced in the U.S. Senate would expand the IRA charitable rollover to include distributions to donor-advised funds and create a 1 percent private foundation excise tax, the NonProfit Times reports.

The IRA charitable rollover currently excludes gifts to donor-advised funds. The Charities Helping Americans Regularly Throughout The Year Act (S. 2750) or CHARITY Act, as the new measure is titled, also contains non-binding language that states charitable giving should be a goal of comprehensive tax reform. The bill was introduced by Sen. John Thune (R-SD) and Senate Finance Committee ranking member Ron Wyden (D-OR). The Alliance for Charitable Reform is seeking co-sponsors for the bill.

For several years, ACR has called for streamlining the private foundation excise tax from its current two-tiered rate structure to a flat rate of 1 percent. In 2014 and again in 2015, Republicans and Democrats in the House of Representatives passed such a measure as part of the America Gives More Act, but the legislation died in the Senate. "Last year, the charitable sector helped to pass a permanent extension of the IRA charitable rollover," ACR executive director Sandra Swirski said in a statement. "The bill introduced today builds on that victory."

Despite bipartisan support for the bill, its immediate future remains uncertain. "Even if it's not enacted, introduction of the bipartisan bill by two top tax policy leaders makes a powerful statement about charitable giving as a priority," said Steve Taylor, vice president of public policy for United Way Worldwide. "And it's a great marker for larger budget or tax reform bills."

Mark Hrywna. "IRA Rollover, Excise Tax Included in CHARITY Act." NonProfit Times 04/06/2016.