Legislative and regulatory issues of interest to our members. If you would like to view our archived articles, click here.
The Legacy IRA HR 5171
The Board of Directors of the American Council on Gift Annuities is excited to join the remainder of the charitable community in announcing the introduction of HR 5171, The Legacy IRA.
This bill will extend the right of American taxpayers to use portions of their Individual Retirement Accounts to fund Charitable Remainder Trusts and Charitable Gift Annuities during their lifetime. This compliments and completes the provisions of the PATH Act of 2015 which made the use of IRA assets for lifetime outright gifts permanent.
Also begin immediately contacting your Congressmen and Senators and ask them to become co-sponsors of HR 5171. NOW IS THE TIME WE HAVE WAITED FOR DURING THE LAST SEVERAL DECADES!. You are a vital part of making The Legacy IRA a reality. Do your part now!
Click here to view ACGA”s letter to The Honorable Peter Roskam in support of The Legacy IRA.
Charitable IRA Initiative
YOU have the opportunity to take action that would be helpful to charities throughout the USA! The charitable community has the unique opportunity to focus the power of donors around the country on passage of legislation that will simplify the process and the tax liability when donating IRA assets to charity.
At the middle of 2014 it was estimated that $6,421,000,000,000 (that’s Trillions) was being held in IRA accounts. Estimates further indicate that approximately 47% of all households in the USA hold 25% of all mutual funds through their personal traditional IRA accounts.
Progress Report: Charitable IRA Initiative
The Charitable IRA Initiative is a 501(c)(4) organization created to pursue legislation that would expand and make permanent the Charitable IRA Rollover. Following is the first of periodic reports you may expect to receive regarding progress in achieving this objective.
This report has been drafted by Conrad Teitell, pro bono counsel to the Charitable IRA Initiative, who is leading the legislative effort. Conrad Teitell has served for many years as volunteer counsel to the American Council on Gift Annuities.
“The Charitable IRA Initiative continues actively to seek legislation that would make the expired direct Charitable IRA Rollover permanent and expanded to include life income gifts.
“Our recent activities: meetings in Washington D.C. in April and May with key legislators and their aides, plus a meeting with Ways and Means Committee staff members. We have also had two meetings with staff of the Joint Committee on Taxation (“JCT”). These are hard-to-get meetings. Congress wants to know the cost (called “the score”) of the proposed legislation. The JCT gets over 10,000 requests per year for scores and, we are told, can only score a few hundred bills. The congressman and senator who have asked that our bill be scored have been told that we will have a score in June. We were fortunate in being able to meet the JCT and give them our reasons why the life income provision could have a neutral or positive score.
“It has been a cliché that the two things one should not see being made are sausages and laws. The U.S. Senate demonstrated this just recently by making the America Gives More Act (H.R. 644) passed by a two-thirds majority in the House and put on the Senate calendar – disappear from the face of the earth.
“How could that be? It takes 60 votes to be placed on the Senate calendar. The Senate was debating the Pacific trade bill, but didn’t have 60 votes. However, there was the America Gives More Act (that would make the direct Charitable IRA Rollover and a few other charitable provisions permanent) sitting on its calendar. PRESTO: the title of the bill was changed to a trade bill title, all of the charitable provisions were removed, and the trade provisions were substituted.
“Bottom line: There is no longer a bill passed by the House and before the Senate that makes permanent the direct Charitable IRA Rollover. For this reason, we believe our efforts to make permanent the expired law and expand it takes on additional and timely importance.
“We will be back in Washington for two days in June to press our case.”
IRA Charitable Rollover Legislation Signed
Today, President Barack Obama signed legislation to reinstate retroactively the IRA charitable rollover. While the timeline for making IRA charitable rollover gifts is tight (the reinstatement expires January 1, 2015), it is not too late to let your donors know that they still have time to take advantage of this gifting opportunity. The provision allows each IRA owner who is 70 1/2 or older to make direct transfers of up to a total of $100,000 per year to one or more qualified charities. The IRA charitable rollover is tax-free and not included in adjusted gross income. For more information and planning thoughts, please watch the video presentation from Emanuel J. Kallina II, J.D., LL.M., Managing Member of Kallina & Associates, LLC and ACGA Board member.
As a reminder, the IRA rollover provision excludes IRA transfers to fund charitable gift annuities.
Take Action TODAY - IRA Rollover Legislation
Urge Your House Member of Congress to Pass Legislation That Includes a Permanent Extension of the IRA Rollover Provision
We have learned that the House plans to place a standalone bill on the suspension calendar (a fast-track means of passing legislation) that would permanently extend the following three charitable provisions that were contained in the Tax Increase Prevention Act of 2014 (H.R. 5771):
- the IRA Rollover provision
- the deduction for gifts of food inventory and
- the deduction for conservation easement contributions.
In order for this bundle to pass the House, 50-65 Democrats are needed to vote in favor of the bill. Time is of the essence as we've heard that a House vote could come as early as today.
ACGA's Statement Regarding the House’s Tax Reform Bill
ACGA requests that the House’s tax reform bill:
- Make permanent the IRA/charitable rollover for direct transfers to public charities (expiring this year).
- Expand the IRA/charitable rollover to allow a rollover for charitable life-income plans for donors.
- Provide an option for donors to make charitable contributions by April 15 and elect to deduct them on the prior year’s income tax return (due by April 15 in the year that the election is made).
- For all new charitable remainder unitrusts and annuity trusts, decrease the minimum annual payment to three percent.
Click here to read the full statement.
Conrad Teitell Speaks to the Committee on Ways and Means on Behalf of ACGA
On Thursday, February 14, 2013, Conrad Teitell, volunteer legal council for the ACGA, spoke to the Committee on Ways and Means regarding tax reform and charitable contributions including the ACGA's proposed All-American Charitable IRA Rollover Act. Mr. Teitell addressed four points including asking Congress to: (1) make permanent the provision that allows direct tax-free distributions from IRAs to charity (the so-called IRA/charitable rollover); (2) expand the IRA rollover to include transfers to fund a charitable life-income plan for the donor; (3) eliminate the charitable deduction as one of the deductions subject to the reinstated overall limitation on itemized deductions (the Pease provision); and (4) not place a cap or floor on the charitable deduction - or impose a lower tax rate at which contributions may be deducted. Mr. Teitell summed up by reporting that decreased support from federal, state and local governments and increased burdens on charities make this the time to enact legislation that increases - not decreases - the incentive to make charitable gifts. Charities need the funds now to do their vital work. To read Mr. Teitell's entire statement to the the committee, click here.
Charitable Gift Annuities Exemption Model Act
Note: The following Charitable Gift Annuities Exemption Model Act was approved by the National Association of Insurance Commissioners (NAIC) at its Winter Meeting on 12-07-98 in Orlando, Florida. In early 1999, it was forwarded to the Insurance Commissioners of all 50 states (and the District of Columbia) with its Meeting Minutes, for forwarding to the state legislatures, suggesting that each state legislature choose either it or the Charitable Gift Annuities Model Act and make it a part of the Insurance Law of that state.
Charitable Gift Annuities Model Act
Adopted by the Life Insurance (A) Committee.
Text of Philanthropy Protection Act of 1995
Note: The Philanthropy Protection Act of 1995 prohibits the payment of commissions or remuneration to anyone based on the value of a charitable gift annuity given to a public charity, and also requires the charity to provide a Disclosure Statement to the donor prior to the receipt of the donor's first annuity gift given to that charity. See text of the Law below and the Statement by the National Committee on Planned Giving (NCPG) and the American Council on Gift Annuities (ACGA) on the payment of commissions by a charity in return for a gift annuity - found at http://www.ncpg.org/.
FULL TEXT OF H.R.2519 - 104th U.S. Congress