CARE Act Included in 'Top Ten' Priorities for 109th Congress
(Jan. 31, 2005) The Charity Aid, Recovery and Empowerment (CARE) Act has been introduced this year as part of Senate Bill 6 (S. 6), which is one of the top ten legislative priorities for the 109th Congress over the next two years.
On Jan. 24, Senate Majority Leader Bill Frist (R-Tenn.) announced the "top ten" bills for the 109th Congress' legislative agenda. The Family and Community Protection Act (S. 6) was part of that list. S. 6 contains language that would make permanent the provisions in the 2001 tax bill relating to families and children. Also included in S. 6 is the CARE Act.
The version of the CARE Act in S. 6 is very similar to last year's legislation and includes proposals such as the IRA Rollover. Currently, donors can rollover funds from their IRAs to charity, but by doing so, they face potentially egregious tax consequences. The rollover would allow individuals to transfer funds tax-free from an Individual Retirement Account to a charitable organization. The IRA Rollover provision is estimated to increase giving by several billion dollars annually.
Other charitable giving incentives contained in the bill include:
- Allowing individuals who do not itemize their tax returns to take a deduction for their charitable gifts;
- Extending the deductions for gifts of food, books and scientific and computer equipment;
- Creating incentives for contributions of property for conservation purposes;
- Enhancing the deduction for contributions of literary, musical, artistic and scholarly compositions; and
- Exempting certain mileage reimbursements to volunteers from gross income.
The CARE Act also contains language restoring funds for the Social Services Block Grant program and the creating Individual Development Accounts. In addition, there are several proposals designed to enhance oversight of the nonprofit sector, such as required disclosure of website names and increased penalties for preparers of Forms 990 who omit or misrepresent information. Most of these proposals were included in previous versions of the bill.
As AFP reported last year, two versions of the CARE Act were passed by both the House and the Senate. Unfortunately, the House and Senate were never able to conference the two bills before the 108th Congress adjourned.
AFP is pleased that the CARE Act was included in Sen. Frist's priority list and is hopeful that Congress will move quickly to pass the CARE Act. However, there are rumors that Congress will offset the cost of the CARE Act by attaching 'revenue raisers' similar to the provisions for vehicle donations and intellectual property donations that found their way into the Foreign Sales Corporation bill last year. If that is the case, AFP will have to work with Congress to ensure that the CARE Act does not contain unacceptable provisions that will cause the bill to do more harm than good.
AFP continues to meet with members of Congress and their staff and will soon be participating in a coalition with other groups in the sector to lobby for the CARE Act. Additional information, including legislative alerts and sample letters, will be distributed to members in the near future.
A copy of the fundraising- and charity-related provisions (PDF format; 43 pages) is available in the Attachments section below.
A full copy of S. 6 is available on the Library of Congress THOMAS website by searching on 'S. 6.'
Related AFP ResourcesAFP Offers Tax Incentive Recommendations to Finance Committee
AFP Political Action Committee Fact Sheet and Q&A
IRS Issues Revised Instructions on New Form 990
IRA Rollover Provision Introduced by Key Senators
AFP Calls on Parliament to Eliminate Capital Gains Tax on Gifts of Securities