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ACGA Collaborates with New York Insurance Department to
Reach Compromise on New Reserve Requirements for
Charities That Issue Gift Annuities in New York.
For more
information, click
here.
NCPG Submits Comments on CRTs and Waiver of Spousal
Election
(6/24/08)
NCPG recently submitted
comments to the IRS on Revenue Procedure 2005-24, which requires
a spousal waiver of their “right of election” against
assets held in a Charitable Remainder Annuity Trust or
Charitable Remainder Unitrust in order to to protect the
tax exempt status of these Charitable Remainder Trusts.
NCPG’s comments state that the Rev Proc “introduces
unnecessary obstacles to the creation and administration
of charitable remainder trusts and that it will
significantly diminish the charitable contributions of
generous Americans.”
The comments go on to state the Revenue Procedure “would
impose significant additional burdens on taxpayers,
charities and their advisors to address a problem that
appeared to be essentially non-existent. The Rev Proc
would also result in the inadvertent disqualification of
many charitable remainder trusts solely because a proper
spousal waiver was not obtained.” NCPG feels that most,
if not all, of the situations contemplated by the Rev
Proc can be addressed using the private foundation
termination tax under Section 507 and the self-dealing
prohibition of Section 4941. The comments conclude,
“NCPG members are concerned that if the waivers
contemplated by the Rev Proc are required to create and
maintain a qualified CRT, there will be numerous
situations in which an otherwise valid CRT that would
never be invaded could be disqualified due the lack of
the required waiver. We strongly urge the Service to not
pursue implementing the Rev Proc.”
Comments are due to the IRS by July 11, 2008.
IRA Charitable Rollover, Other Tax “Extenders” Stall in
Senate
(6/20/08)
Earlier this week, the Senate once again failed to
invoke cloture on a motion to proceed to a House-passed
tax extenders bill (H.R. 6049), which includes a
one-year retroactive extension of the IRA Charitable
Rollover, among other provisions. According to Senate
Finance Committee Chairman Max Baucus, it is now highly
unlikely the Senate will vote on any of the tax
extenders before the July 4th recess.
The stalemate on this legislation is because of
disagreement between Democratic and Republican leaders
over whether to off-set the various tax extenders with
provisions that raise revenue for the federal government
and whether to include and off-set a one-year fix to the
alternative minimum tax.
NCPG continues to work in Washington to push for a
retroactive extension of the IRA Charitable Rollover as
soon as possible and then expansion to allow for
life-income gifts. Accordingly, NCPG encourages all
members to contact their Senators and ask them to pass
the tax extenders bill. To view a sample letter and
talking points, click
here.
Senate Considers Tax Legislation; Grassroots Contacts
Needed
(6/11/08)
On June 10, the Senate failed to invoke cloture on a
motion to proceed to the House-passed tax “extenders”
bill (H.R.6049), which includes a one-year extension of
the IRA Charitable Rollover. Senate Finance Committee
Chairman Max Baucus has expressed confidence that the
tax “extenders” legislation will once again be
considered by the Senate later this week. At present,
Democratic and Republican leaders need to work out their
differences over the question of whether to off-set the
various tax extenders and whether to include and off-set
a one-year fix to the alternative minimum tax.
Earlier today, Chairman Max Baucus announced a
substitute amendment to H.R.6049 that he intends to
offer when the tax extenders legislation is reconsidered
in the Senate. Chairman Baucus’ substitute amendment
would retro-actively extend the IRA Charitable Rollover
through 2008 but not expand it. This provision is
identical to a provision in H.R. 6049, which passed the
House on May 21.
NCPG
strongly encourages its members to contact their
Senators,
particularly the Republican offices, and ask them to
pass the tax extenders bill before the July 4th
Congressional recess. To view a sample letter and
talking points,
click
here.
Senate Expected to Consider IRA Rollover Extension
Within Days...
(6/11/08)
The Senate is expected to consider the House-passed tax
"extenders" bill (H.R. 6049) with modifications that
have yet to be announced as early as this week.
Congressional staff indicate this may be the last
opportunity for lawmakers to extend the IRA Charitable
Rollover before the upcoming election, if at all. On May
21st, the House approved H.R. 6049, which would extend
the IRA Charitable Rollover, as included in the Pension
Protection Act of 2006, through December 31, 2008.
NCPG strongly encourages its members to contact their
Senators, particularly Republican offices, and ask them
to pass the "extenders" bill before the July 4th
Congressional recess. To view a sample letter and
talking points, click
here.
...While
Lawmakers Voice Support for Inclusion of Life-Income
Gifts
Earlier this week, the Senate and House approved the
fiscal year 2009 budget resolution conference report.
NCPG is pleased to report the final conference report
expresses support for a deficit-neutral reserve fund
that would, among other things, reinstate and expand the
IRA Charitable Rollover to more closely track S. 819,
the Public Good IRA Rollover Act. Specifically, section
236 of the conference report states the "Chairman of the
Senate Committee on the Budget may revise the allocation
. . . and other levels in this resolution for one or
more bills . . . or conference reports that would . . .
extend enhanced charitable giving from individual
retirement accounts, including life-income gifts . . ."
The budget resolution is a non-binding document, setting
out a blueprint for the annual appropriations process.
Inclusion of the IRA Charitable Rollover and mention of
life-income gifts in particular represents a significant
step towards a permanent and expanded provision.
Also, late last month, Senators Dorgan and Snowe, the
sponsor and lead co-sponsor of S. 819, respectively,
sent a
letter
to Senator Max Baucus, Chairman of the Senate Finance
Committee, urging him to reinstate and expand the IRA
Charitable Rollover. The letter also cites NCPG's survey data, which
found that approximately 900 charities have reported
more than 8,500 individual IRA distributions, with a
total value of nearly $140 million.
Major Redesign of Form 5227; Response to NCPG Concerns
(6/10/08)
In response to changes
brought about by The Pension Protection Act of 2006, the
IRS issued a substantially
revised Form 5227,
Split-Interest Trust Information Return, for reporting
by charitable remainder trusts, pooled income funds, and
charitable lead trusts for the 2007 tax year.
On March 31, 2008 NCPG sent a
letter to the
Internal Revenue Service regarding the revision to make
form 5227 available for public inspection. There is
concern among trustees of CRTs, particularly charities,
that donors’ privacy will become an issue once these
forms are filed.
On April 28, NCPG received a
response from the IRS. In part, the letter states
that "I.R.C. § 6104(b) does not protect the name of the
trust, whether it may incorporate the name of a
contributor or non-charitable beneficiary or otherwise."
The letter goes on to say however, that the IRS has no
current plans to make copies of Form 5227 available on
DVD as they do with the Form 990s.
Key changes to Form 5227 include:
-
Split
interest trusts are no longer required to file Form
1041 – A, U.S. Information Return – Trust
Accumulation of Charitable Amounts. Form 5227 now
meets the filing requirements.
-
Form 5227
(except Schedule A, which contains information that
is specific to private beneficiaries) is subject to
the public inspection requirements under section
6104(b).
-
Penalties
for non-filing have been increased and expanded to
include incorrect and incomplete filings.
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Any
charitable remainder trust that has unrelated
business taxable income is liable for a tax which is
treated as a private foundation excise tax equal to
the trust's unrelated business taxable income. It
must file a Form 4720 to report the tax due.
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ACGA Lowers Immediate and Deferred Gift Annuity Rates
(5/6/08)
The American Council on Gift Annuities has approved a
new, lower schedule of gift annuity rates for immediate
gift annuities, effective on July 1, 2008. In addition,
deferred gift annuity rates will also be lower. For
information about the new rates, visit the ACGA web site
at
www.acga-web.org
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