Policy Update
Compliance Report on Non-Cash Gift Requirements
3/13/2007
Source: Independent Sector
TIGTA Releases Report on Compliance with Non-Cash Gift Requirements
The Treasury Inspector General for Tax Administration (TIGTA) says in a March 5 report (pdf) that the Internal Revenue Service needs to do more to educate the public and tax preparers about requirements for claiming non-cash charitable deductions. A TIGTA audit of new reporting requirements that were enacted as part of the American Jobs Creation Act (Pub.
Law No. 108-357) revealed that more than 100,000 taxpayers may have claimed as much as $1.8 billion in unsubstantiated charitable contributions from January 15 to September 21, 2006. In particular, TIGTA found that 24 percent of taxpayers donating non-cash gifts valuing between $500 and $5,000 in tax year 2005 failed to adequately document the total value of the gifts, while 19 percent of taxpayers contributing gifts valued over $500,000 failed to substantiate them.
Responding to the report in a March 16 press release (pdf), Senate Finance Committee Ranking Member Charles Grassley (R-IA) said it “shows there are still very real problems with non-cash charitable contributions and that these problems contribute significantly to the tax gap.” Source: BNA Daily Tax Report and Tax Analysts
CRS Updates Report on Food Inventory Deduction Reflecting Introduction of S. 689
The Congressional Research Service updated a report on charitable contributions of food inventory to reflect the introduction of the Good Samaritan Hunger Relief Tax Incentive Extension Act of 2007 (S. 689), which is sponsored by Senators Richard Lugar (R-IN) and Blanche Lincoln (D-AR).
The bill would permanently extend and expand a provision that allows a deduction for the full market value of contributions of food inventory to charity. The current provision, enacted as part of the Pension Protection Act of 2006 (Pub. Law No. 109-280), expires at the end of 2007. Source: BNA Daily Tax Report
CBPP Analyzes Senate Committee’s FY08 Budget Resolution; Praises PAYGO Provision
The Center on Budget Policy and Priorities has released a brief analysis of the Senate Budget Committee’s proposed FY2008 federal budget resolution, singling out restoration of pay-as-you-go budget rules on all proposed entitlement spending increases and tax cuts as the “plan’s most important element” and calling the budget proposal “an important first step in restoring fiscal responsibility in Congressional budgeting.”
The Senate Budget Committee passed the measure on a party-line vote last Thursday; it is expected to garner significant debate on the Senate floor this week. Source: Tax Analysts
IRS 2006 Data Book Includes Statistics on Tax-Exempt Organizations
The Internal Revenue Service has released its 2006 Data Book, which summarizes the activities conducted by the Service between October 1, 2005 and September 30, 2006. Among other items, the report details the number of tax-exempt returns filed, broken down by U.S. state; the number and type of tax-exempt returns processed; the number of tax-exempt organization applications collected; and the total number of tax-exempt organizations registered during fiscal year 2006. Source: BNA Daily Tax Report, IRS Newswire, and Tax Analysts
IRS Seeks Public Comment on Guidance on New E-Postcard
As part of its continuing effort to reduce paperwork and respondent burden, the Internal Revenue Service is seeking public comment on the new Form 990-N, “Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ," which was created to implement a provision enacted in the Pension Protection Act that requires exempt organizations with gross receipts under $25,000 to file an annual electronic notice with the IRS. Comments are due by May 14, 2007. Source: BNA Daily Tax Report and Tax Analysts