Tax Incentives for Charity: An Overview of Legislative Proposals

Publication Date: December 2005

Publisher: Library of Congress. Congressional Research Service

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Research Area: Banking and finance

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Abstract:

This reports briefly discusses the tax provisions in the current charitable giving tax incentive bills (S. 1780, H.R. 3908) and in the Senate reconciliation bill, S. 2020. Provisions include charitable deductions for non-itemizers, rollovers of IRAs into charitable uses, an increase in the deductions cap for corporate contributions, and several narrower provisions. Bills have been introduced in both the House (H.R. 3908, the Charitable Giving Act of 2005) and the Senate (CARE Act of 2005) to provide additional benefits for charitable giving. In addition, S. 2020, the Senate reconciliation bill, includes charitable provisions along with offsetting revenue raisers.

Legislation proposing tax incentives for charity began with H.R. 7 (107th Congress), adopted in 2001 by the House. H.R. 7 had eight new tax provisions designed to benefit charitable giving, including a capped deduction for non-itemizers. The President had proposed three of these provisions in 2001. Senate consideration also began in the 107th Congress with S. 1924, which would have provided a temporary non-itemizers deduction with a higher cap along with other provisions.

The bill was reported from committee with a temporary non-itemizers deduction with both a floor and ceiling, but was not considered on the floor. It excluded some provisions of H.R. 7 but contained others. In 2003, a similar bill, S. 476, passed the Senate and a new version of H.R. 7 passed the House. These provisions were included in several 109th Congress bills: H.R. 3908, S. 6, S. 1780, and S. 2020; the latter has passed in the Senate.

This report discusses these provisions, focusing on H.R. 3908, S. 1780, and S. 2020.