Fall 2008 Public Policy Update
IRA Rollover Extended Through Dec. 31, 2009
President Bush has signed into law the $700 billion economic bailout bill (H.R. 1424, Financial Rescue Package), which includes a two-year extension of the IRA Rollover provision as well as other charitable giving provisions.
None at this time.
The provision will be made retroactive to Jan. 1, 2008, and will apply to gifts made from that date through Dec. 31, 2009.
The provision exempts from taxable income any funds transferred (“rolled over”) from an Individual Retirement Account (IRA) to a charitable organization. The following limitations apply:
- The donor must be age 70½ or older.
- The cap on annual IRA rollovers is $100,000.
- The contribution must be a direct gift to a charity (no planned gifts).
The provision expired at the end of 2007, and one of AFP’s chief legislative goals has been to reinstate the provision and make it permanent.
AFP will continue to push for changes to the rollover provision in 2009, including lowering the age for donors, increasing the cap on gifts and making the provision permanent.
Other Giving Incentives
The bill also contains several other provisions related to charitable giving, including two specifically focusing on disaster relief efforts in the Midwest. Individuals and businesses located in presidentially declared disaster areas due to floods, tornados and severe storms in Iowa, Arkansas, Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska and Wisconsin would be eligible for these provisions
People who use their vehicles for disaster relief can deduct 41 cents per mile — or about 70 percent of the current business mileage rate through the end of 2009. The rates now are 14 cents per mile for charitable activities and 58.5 cents for business activities. Volunteers can also exclude from their income reimbursements from charities for use of their vehicles up to the amount of the standard business rate through the end of 2009.
In addition, the following provisions were reinstated and extended through 2009:
- Extension of enhanced charitable deduction for contributions of food inventory
- Enhanced charitable deduction for contributions of book inventories to public schools
- Extension of enhanced deduction for corporate contributions of computer equipment for educational purposes
Canadian Radio-television and Telecommunications Commission Suspends References to Fees on Registered Charities
In an amended letter dated Oct. 20, 2008 (the original letter was dated May 22, 2008), the CRTC stated that it could not find a third-party complaints investigator and therefore it will take on that role itself. Therefore, the CRTC decided to suspend all references to fees regarding the third-party complaints investigator and records relating to such fees until further notice. However, the CRTC reserves the right to reintroduce the fee regime at any time.
Please urge your Members of Parliament and Senators to weigh in with Cabinet and support the AFP and Imagine Canada petition that would exempt registered charities from additional bureaucracy and the fee regime. AFP’s white paper on the issue is below in the attachments section.
Also, please urge your own organizations to contact Cabinet, their Members of Parliament and Senators.
If you would like to contact Cabinet directly, please write to:
Mr. Kevin Lynch
Clerk of the Privy Council and Secretary to the Cabinet
80 Wellington Street
In January 2008, the CRTC ruled that all organizations that carry out telemarketing activities—including registered charities and other exempt organizations—must register with the new national DNCL operator and help finance the costs of enforcing the telemarketing rules by paying fees. The CRTC’s decision did not put a cap on the fees, meaning that the CRTC could charge any amount and/or raise the fees unilaterally at any time.
In April 2008, Imagine Canada and AFP filed a joint Petition to Cabinet (within the 90 day time period allowed for appeals).
The Petition asked Cabinet to require the CRTC to vary or rescind its ruling and exempt registered charities from the fees. We argued that the CRTC’s ruling:
- 1. imposed a new regulatory burden and red tape on registered charities, even though Parliament had exempted registered charities from the national DNCL regime, which is the principal element of the telemarketing rules;
- 2. required registered charities to pay fees that can hardly be considered charitable expenditures, and
- 3. flew in the face of the long-standing history of regulatory forbearance toward charities exercised by federal, provincial and municipal governments on issues ranging from income tax, to municipal property tax, to corporate governance obligations under corporations law.
Cabinet has until January 2009 to act on our joint Petition.
National Philanthropy Day® – Status Report
As you know, elections were held in October. Unfortunately, the elections prevented the House of Commons from acting on the National Philanthropy Day® bill and other legislation.
In the very near future, AFP will ask you to contact your Members of Parliament and Senators to urge them to finally pass this landmark bill.
Earlier this year, the Senate passed S-204, a bill that would officially make Nov. 15 the official, government-recognized date for National Philanthropy Day® (NPD) in Canada. However, unrelated administrative matters in the House of Commons prevented the bill from receiving additional consideration before Parliament adjourned.
The NPD initiative continues to receive strong support from Parliament, and most of the key political parties have indicated they favor the legislation.
A copy of Bill S-204 from the last session of Parliament can be found here.
Once the bill is reintroduced, AFP will urge Parliament to restore its status as Senate-passed and awaiting House passage.
The Canada Revenue Agency’s Fundraising Guidelines – Status Report
In September, informal consultations were held between representatives of the Canada Revenue Agency (CRA) and AFP, Imagine Canada and the Health Charities Coalition of Canada to discuss the points in the group’s August submission (that was endorsed by over 85 organizations) to the CRA. The proposed fundraising ratio grid and other issues were discussed at length. CRA also received and is considering feedback from other sector organizations.
None at this time.
The CRA issued this brief update on its website.
Although participating organizations are not expecting CRA to formally re-issue its paper, the CRA has undertaken to revise its draft fundraising policy in light of the feedback received from the sector.
AFP continues to work with the CRA on this issue and will keep members apprised of any developments.
AFP and the AFP Vancouver Chapter Submit Provincial Pre-Budget Consultation Recommendation
During recent pre-budget consultations, AFP submitted a brief (found in the attachments, beow), recommending that the government consider increasing the provincial portion of the charitable tax credit. Currently, British Columbia has the third lowest rate of charitable tax credits in the country, behind only Nunavut and Yukon territories.
All AFP members in British Columbia are urged to contact Finance Minister Colin Hansen. A draft letter can be found in the attachments below.
On Nov. 19, the Finance Committee released its report on the 2009 Budget Consultations, and it is recommending that the government include AFP’s proposal in the upcoming budget. AFP’s brief is included in the attachments below. Should the government decide to include the measure in the 2009 budget, it will place British Columbia on par with Alberta and provide a combined (federal and provincial) charitable tax credit of 50 percent at the top-end.
In addition to the submission, AFP Vancouver Chapter Board Chair Jackie Smith and Government Relations Committee Chair Andrea Wilkinson delivered the request directly to Finance Minister Colin Hansen at a recent Surrey Board of Trade meeting.
Related AFP ResourcesAFP Offers Tax Incentive Recommendations to Finance Committee
President Obama and GOP Tax Cuts Extension Could Extend the IRA Rollover Provision
AFP Political Action Committee Fact Sheet and Q&A
IRS Issues Revised Instructions on New Form 990
IRA Rollover Provision Introduced by Key Senators