Tax reform and the charity deduction
Tax reform, and with it, the possibility that the tax deduction for charitable contributions will be diminished–made less valuable or (less likely) be redefined to exclude some currently eligible religious organizations–appears to be off the table at least until after the November elections. That’s partly because tax reform is inevitably controversial and partly because the prime mover for tax reform in the Senate, Sen. Max Baucus (D-MT), has left to become US Ambassador to China, disrupting the reform movement there.
Nevertheless, the impetus, at least in the abstract, to reform the tax code remains strong, and what is done eventually is likely to grow out of the discussions that continue to go on in the House and Senate. Thus the importance of the multi-faceted reform plan recently proposed by Rep. David Camp (R-MI).
The major focus of the Camp bill is lowering tax rates and simplifying tax rules to spark economic growth, but he has proposed a series of changes to the charitable deduction and to other tax requirements that affect religious charities and churches.
Dan Busby, head of the Evangelical Council for Financial Accountability, said this about Rep. Camp’s plan: “I am very concerned about the reduction in incentives which would negatively impact charitable giving–particularly the proposed floor on the charitable giving deduction and changes to valuation rules for gifts of property. Additionally, eliminating the rebuttable presumption will allow the IRS to wield too much power against charities.”
To monitor developments concerning charitable giving incentives, check here: