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U.S. Senate Finance Committee Investigates Donations of Land, Other Property

(June 13, 2005) On Wednesday, June 8, the Senate Finance Committee held a hearing on issues related to gifts of land/conservation easements, focusing on possible abuses of charitable land trusts and conservation easements.

Sen. Charles Grassley (R-Iowa), chair of the committee, opened the hearing with a discussion of a report on the abuses of tax shelters created by some of the Nature Conservancy's conservation easements. His opening remarks also highlighted the actions of a handful of other large charitable land trusts which the committee identified as acting in a manner inconsistent with their tax exempt status.

Grassley indicated that he was very concerned about allowing tax exempt entities to perform complex accounting procedures, which could shift the focus of a nonprofit organization far away from their particular area of expertise. He cautioned the rest of the committee on the dangers involved when allowing these nonprofits to operate so far away from their specific charitable intentions.

The following individuals testified at the hearing:

  • Mr. Jonathan Selib, tax counsel, U.S. Senate Committee on Finance, Washington, D.C.
  • Mr. Dean Zerbe, tax counsel and senior counsel to the chairman, U.S. Senate Committee on Finance, Washington, D.C.
  • Mr. Earl E. Devaney, inspector general, U.S. Department of Interior, Washington, D.C.
  • Mr. Steven J. McCormick, president and CEO, Nature Conservancy, Arlington, Va.
  • Mr. Rand Wentworh, president, Land Trust Alliance, Washington, D.C.
  • Mr. Timothy Lindstrom, director of protection & staff attorney, Jackson Hole Land Trust, Jackson, Wyo.
  • Mr. Burnet R. Maybank, III, director, South Carolina Department of Revenue, Columbia, S.C.
  • Mr. Steven T. Miller, commissioner, Tax Exempt and Government Entities Operating Division, Internal Revenue Service, Washington, D.C.

During the hearing, Sen. Grassley indicated he intends to press forward with his series of charitable reform measures. AFP continues to hear that Grassley will attach his proposed reform measure to the Charity Aid, Recovery and Empowerment (CARE) Act and pass the entire package this summer.

Many of the statements from the hearing, as well as the committee's report on the Nature Conservancy, are available at the committee's website.

Coalition to Uphold Noncash Charitable Giving Presses On

The Coalition to Uphold Noncash Charitable Giving continues its work to preserve the existing noncash gift contribution rules. The coalition finalized its Statement of Purpose. A copy of that statement is available in the Attachments section below.

The coalition is now working on a Democratic 'Dear Colleague' letter that will loosely parallel the letter recently sent by a bi-partisan group of Senators led by Sen. Rick Santorum (R-Pa.). That letter cautioned Grassley and Ranking Member Max Baucus (D-Mont.) that their proposed charitable reforms might affect legitimate nonprofit organizations.

Once the Democratic 'Dear Colleague' letter is finalized, AFP (along with other members of the coalition) likely will call upon its members whose Senators are Democrats and ask that they urge them to sign on to the 'Dear Colleague' letter.

In the meantime, AFP encourages members to contact their Senators about any concerns they have regarding these reform measures. It is imperative that there is a vocal constituent effort in conjunction with the coalition's work.

Attachments

Coalition Statement of Purpose — PDF Format, 70731KB

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