Congress Considering Nonprofit Tax Provisions

Congress Considering Nonprofit Tax Provisions

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In advance of comprehensive tax reform, both the House and Senate are taking action to pass more targeted tax-law changes, some of which relate to the support and operations of charitable nonprofits. On February 12, the House passed the America Gives More Act by a vote of 279 to 139. The legislation would reinstate and permanently extend three expired charitable giving incentives – food inventories, conservation easements, and the IRA rollover – as well as streamline the foundation excise tax. The Senate is not expected to take up the bill immediately, opting instead to focus for the time being on attempting to craft comprehensive reform legislation on a bipartisan basis. The Senate Finance Committee, however, has produced a package of 17 noncontroversial tax provisions that may be considered on the Senate floor in the coming weeks. One provision would require the Internal Revenue Service to notify exempt organizations before revoking exempt status for failing to file information returns, as required under the Pension Protection Act of 2006. This bill, known as the NOTICE Act (S.400), also would allow the IRS to retroactively reinstate tax-exempt status to nonprofits that do not receive notice of the need to file in time. Another of the provisions would provide an exception to the private foundation excess business holdings rules for certain philanthropic business holdings.

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