Charities Fighting to Prevent Limits on Charitable Deduction

November 28, 2012

The charitable community is speaking out strongly against a deduction cap. David L. Thompson, vice president of public policy at the National Council of Nonprofits, said his organization has told its members that the matter is more urgent than during previous attempts to limit the deduction.      

"This time it's real because they're rushing to make a deal, and the cap on the itemized deductions is an easy fix," Thompson told Tax Analysts. "It's a one-sentence provision in legislation that has horrendous consequences, but it's easy to ignore."      

Thompson said a cap is particularly worrisome to charities because unlike the other itemized deductions, the deduction for charitable giving is discretionary. "Charitable giving is squeezed out by the big fixed-cost deductions such as mortgage interest, state and local taxes, health costs, and so forth," he said. "It's only after those are calculated that an individual will know whether there's room under the cap for charitable giving."