U.S. President Bush Signs Charity Provisions Into Law
Charity News Online
President Bush on Thursday signed into law a bill that contains a series of provisions designed to stimulate charitable giving and cut down on abuses of charity tax laws by donors and nonprofit organizations, The Chronicle of Philanthropy of reports. The law's chief incentive for charitable gifts allows donors aged 70 ½ and older to withdraw up to $100,000 each year from their individual retirement accounts tax-free if they give the money directly to a charity. Over all, said Brian A. Gallagher, president of United Way of America, "these reforms and new tax incentives will strengthen the nation's charities."
The charity provisions — parts of which have drawn mixed reactions from charity leaders — are part of a broader law, the Pension Protection Act of 2006, a package of tightened rules for the country's private pension system that was recently approved by Congress. The law has seven major provisions intended to encourage charitable giving, or in other ways assist charities, and 17 key provisions that were written to crack down on abuses by charities or donors, or make other changes, according to the House Committee on Ways and Means.
"It reforms key laws governing nonprofit organizations to make sure that money that's deducted for charitable purpose goes to charitable purpose and isn't used as a gimmick to avoid the payment of taxes," said Sen. Charles E. Grassley, the Iowa Republican who is chairman of the Senate Finance Committee and who was a major proponent of the legislation.
"Americans are very generous with their donations. They deserve to know that their money helps the needy, not the greedy." Congress did not include a provision, which it has considered for years, that could spur charitable giving by allowing people who do not itemize deductions on their returns to write off a portion of their charitable donations.
But nonprofit officials were pleased that Congress included the provision to promote charitable giving through individual retirement accounts — which will be in effect for two years (through 2007) — because they say that making it easier for people to donate their retirement funds to organizations will cause a significant amount of money to flow to charity. At the same time, some charity leaders were not happy that the retirement-account provision has a $100,000 annual cap and does not apply to younger donors or to planned gifts, such as charitable remainder trusts.
charity, U.S., House Committee on Ways and Means, United Way of America, Pension Protection Act
Charity News Online
President Bush on Thursday signed into law a bill that contains a series of provisions designed to stimulate charitable giving and cut down on abuses of charity tax laws by donors and nonprofit organizations, The Chronicle of Philanthropy of reports. The law's chief incentive for charitable gifts allows donors aged 70 ½ and older to withdraw up to $100,000 each year from their individual retirement accounts tax-free if they give the money directly to a charity. Over all, said Brian A. Gallagher, president of United Way of America, "these reforms and new tax incentives will strengthen the nation's charities."
The charity provisions — parts of which have drawn mixed reactions from charity leaders — are part of a broader law, the Pension Protection Act of 2006, a package of tightened rules for the country's private pension system that was recently approved by Congress. The law has seven major provisions intended to encourage charitable giving, or in other ways assist charities, and 17 key provisions that were written to crack down on abuses by charities or donors, or make other changes, according to the House Committee on Ways and Means.
"It reforms key laws governing nonprofit organizations to make sure that money that's deducted for charitable purpose goes to charitable purpose and isn't used as a gimmick to avoid the payment of taxes," said Sen. Charles E. Grassley, the Iowa Republican who is chairman of the Senate Finance Committee and who was a major proponent of the legislation.
"Americans are very generous with their donations. They deserve to know that their money helps the needy, not the greedy." Congress did not include a provision, which it has considered for years, that could spur charitable giving by allowing people who do not itemize deductions on their returns to write off a portion of their charitable donations.
But nonprofit officials were pleased that Congress included the provision to promote charitable giving through individual retirement accounts — which will be in effect for two years (through 2007) — because they say that making it easier for people to donate their retirement funds to organizations will cause a significant amount of money to flow to charity. At the same time, some charity leaders were not happy that the retirement-account provision has a $100,000 annual cap and does not apply to younger donors or to planned gifts, such as charitable remainder trusts.
charity, U.S., House Committee on Ways and Means, United Way of America, Pension Protection Act
posted by Lisa Vronskaya at 10:35 AM
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