AFP to Congress: Make the IRA Rollover Permanent
(July 30, 2007) In written comments delivered to Congress on Tuesday, July 24, AFP called for the expansion and permanent extension of the IRA Rollover provision and congressional allocation of greater resources for Internal Revenue Service (IRS) enforcement initiatives.
AFP submitted comments in response to a request from Rep. John Lewis (D-Ga.), the chair of the House Ways and Means Oversight Subcommittee, asking for expert input on provisions in the Pension Protection Act of 2006 related to charitable organizations.
The act includes the IRA Rollover provision, which allows donors age 70½ to exclude from their income any IRA funds up to $100,000 that are withdrawn and transferred to a charity when filing a tax return for the year of the transfer.
However, the IRA Rollover provision is scheduled to sunset at the end of 2007. In its comments, AFP urged Congress to not only make the IRA Rollover permanent, but also to enhance the provision by removing the $100,000 cap on gifts from IRA accounts and lower the age threshold for all such gifts from 70½ to 59½.
“Tax incentives such as the IRA Rollover provision play a vital role in encouraging donors to make gifts, especially as the contribution amounts become larger,” said Paulette Maehara, CFRE, CAE, president and CEO of AFP. “In fact, in just the past 10 months, the IRA Rollover provision has brought in more than $69 million in new gifts for the charitable sector according to a recent National Committee on Planned Giving survey. And that’s just the tip of the iceberg given that the survey covers just a fraction of the sector. We believe that the rollover could increase support for the vital work of charitable organizations by billions of dollars every year.”
For more information about AFP’s work on the IRA Rollover provision, click here. While AFP’s IRA Legislative Hotline is now closed, members are still encouraged to contact their members of Congress and urge them to make the IRA Rollover permanent.
Sufficient Funding for the IRS
The Pension Protection Act also contained several common sense reforms that are not likely to burden America’s charities and are good policy. However, in its comments AFP expressed concern about the possible enactment of unduly burdensome charitable reforms, such as unprecedented user fees and floors for itemized deductions, which would deter charities from fulfilling their altruistic missions.
“AFP does not oppose demonstrably necessary nonprofit sector regulations,” stated Maehara. “Legitimate fundraisers understand the need for regulation, and AFP has strongly supported appropriate and defensible initiatives on both the federal and state levels that have increased regulation of charities and fundraising. But in every case, the regulations that AFP has supported have been balanced with the charitable sector’s need to raise funds for the critical programs it provides.”
AFP also noted that Congress has never provided the IRS with the appropriate funding to enforce he existing laws that are fully sufficient to address abuses. Additional regulations are not the answer, according to Maehara. “The foundation for appropriate oversight is there,” she continued. “It just has to be funded.”
AFP looks forward to working with the House Ways and Means Oversight Subcommittee as it continues to look into issues related to the tax-exempt sector.
A copy of AFP's written comments in PDF format can be found in the Attachments section below.
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