U.S. Sens. John Thune, R-S.D., and Ron Wyden, D-Ore,. today introduced the Charities Helping Americans Regularly Throughout the Year (CHARITY) Act, a bipartisan bill that would encourage charitable giving and make it easier for foundations and other tax-exempt organizations to conduct their charitable missions.

Joined by Sens.  R-SD, Bob Casey, D-Pa., and Pat Roberts, R-Kan., this legislation (S. 1343) builds on several significant charitable tax provisions that were signed into law in 2015, including one that makes permanent a law allowing taxpayers at least 70-and-a-half-years old to make charitable contributions directly from their IRAs. Wyden introduced a similar version of the CHARITY Act in the 114th Congress.

Charitable giving is core to our society and benefits millions of Americans each year,” said Wyden. “This bipartisan bill improves the tax code making it easier for Oregon families to support their favorite charities and ensures that charitable organizations are best equipped to accomplish their missions.”

The CHARITY Act would:

  • Express the sense of the Senate that the promotion of charitable giving be one of the goals of comprehensive tax reform.
  • Make donor-advised funds an eligible charity for purposes of the IRA rollover law that permits an IRA owner at least 70-and-a-half-years old to exclude from his or her gross income up to $100,000 per year in distributions made directly from the IRA to certain public charities.
  • Simplify how foundations are required to calculate the federal excise tax imposed on investment income.
  • Authorize the Treasury Department to adopt regulations that align the simplified standard mileage tax deduction rate, which applies to the use of personal vehicles for volunteer charitable services, with the mileage rate that applies for medical and moving purposes.
  • Promote transparency by requiring nonprofits to file their annual returns electronically.
  • Protect donor information and improve tax administration by eliminating alternative rules for substantiating charitable contributions.
  • Encourage philanthropic enterprises wishing to donate profits to charity by creating a limited exception to the excess business holding tax rules.

Bill text for S. 1343 can be located here and a bill summary here.

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.