recent legislative news > 7/4/2008
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Santorum Prioritizes IRA Charitable Giving Provision
Senate Finance Committee Member Rick Santorum, R-Pa., said February 7 that his "highest priority" is making sure an IRA charitable giving provision is included in the pending tax reconciliation bill that is expected to go to conference in the coming weeks.
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Washington, D.C.- Senate Finance Committee Member Rick Santorum, R-Pa., said that his "highest priority" is making sure an IRA charitable giving provision is included in the pending tax reconciliation bill that is expected to go to conference in the coming weeks.
At the February 7 Annual Meeting of the National Association of Independent Colleges and Universities (NAICU), Santorum said the IRA provision will "unlock" billions of dollars for charities, which are suffering from a downswing in charitable giving. The provision, which would allow tax-free IRA distributions for charitable giving purposes, made its way into the Senate-passed version of tax reconciliation legislation (S. 2020), but not the House-passed version (H.R. 4297).
According to Santorum, the current low level of charitable giving is "a sign of a culture that is not understanding the important role that charitable organizations provide."
Congress must create incentives to stimulate charitable giving, said Santorum, who also said that he plans to push for a provision in the tax reconciliation bill that would permit nonitemizers to deduct charitable contributions as well as provisions that would encourage food, book, and land donations.
Although Santorum said there needs to be "legitimate tightening" of charitable abuses, he worried that some charitable reporting regulations the Finance Committee included in the tax reconciliation bill will negatively affect smaller charities that don't have the administrative funds larger charities have.
"French chefs, expensive airplanes . . . they're very hard to justify," admitted Santorum.
However, the senator said Congress needs to pass legislation that "ensures public dollars are protected, but at the same time doesn't destroy the organizations we hope to help."
According to Santorum, he and Finance Committee Chair Chuck Grassley, R-Iowa, have had some "knock down, drag out fights for the past few months," but, he added, in the process "we've got probably 90 percent of the bad stuff out."
The Ripple Effect
Grassley is learning quite a bit from his investigation into American University's alleged excessive compensation abuses, said a Senate Finance Committee staffer at an earlier session of the NAICU conference.
The staffer advised attendees to make sure their universities fully disclose all types of compensation executives are receiving, and cautioned against the notion held by some university board members that abuse isn't happening at their universities.
Universities should use Grassley's letter to AU as an "exercise" to critique their own executive compensation practices, said the staffer.
Celia Roady, a partner at Morgan Lewis Resources, listed four strategies universities could employ to avoid IRS and Congressional scrutiny:
- Assemble an independent compensation committee to review executive compensation issues;
- Ensure that compensation is properly documented;
- Make certain that data that backs up the reasonableness of compensation "looks at the whole picture"; and
- Treat taxable benefits, such as personal use of an automobile and spousal travel, as compensation.
English Honored
- Later in the day, Rep. Phil English, R-Pa. -- who has supported tax incentives such as implementing the tuition deduction for higher education expenses, expanding the student loan interest deduction, and making permanent higher education incentives that are set to expire in 2011 -- was awarded with the NAICU's 13th Annual Award for Advocacy of Independent Higher Education.
- During his acceptance speech, English said the rising debt burden among recent college graduates necessitates that Congress make permanent tax education incentives such as the above-the-line tax deduction for college tuition.
