Special Report: House of Representatives Approves IRA Rollover…Again

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The US House of Representatives has passed a bill to renew and make permanent the IRA Rollover, a measure long-supported by the nonprofit sector. Congress approved the bill by a vote of 279-137. Of note, 39 Democrats joined with the Republican majority to ensure passage by a wide margin. The bill now moves to the Senate.

Like a similar measure passed last year, H.R. 644 — Fighting Hunger Incentive Act of 2015 includes the following components:

  • The IRA Rollover provision,
  • Extension and expansion of the charitable deduction for contributions of food inventory,
  • Enhanced deduction for gifts of qualified conservation easements,
  • Modification of the excise tax on the investment income of private foundations.

Unfortunately, President Barack Obama has once again vowed to veto the bill if it reaches his desk in its present form. The House would need 290 votes to override a veto.

Making Sausages 4 by Erich Ferdinand via FlickrThe White House opposition to the bill might be because the bill does not contain any provision that would pay for the tax breaks it would provide. The Congressional Budget Office has concluded that the bill would add to the Federal deficit.

Last year, the Democrat-controlled Senate failed to take any action on the comprehensive charitable giving incentive measure passed by the House. Now that Republicans control the Senate, there is a greater expectation of action this year. However, it remains to be seen if the bill can be modified to garner presidential support.

It’s somewhat encouraging that Congress is addressing the issue early in the year rather than waiting until the eleventh hour. However, anything can happen, and final passage is far from assured.

As the German statesman Otto von Bismarck once noted:

Laws are like sausages, it is better not to see them being made.”

As developments warrant, I’ll continue to keep you informed.

That’s what Michael Rosen says… What do you say?

6 Comments to “Special Report: House of Representatives Approves IRA Rollover…Again”

  1. Love the sausage analogy, Michael. This tide in the House, and hopefully the Senate is gaining strength and I certainly hope the 290 in the House is there to override Obama’s obvious veto of this fetal bipartisan bill while its in utero in the Senate. This is one of 100s of bills that need to be born, for philanthropy’s benefit, not mine. You’re right, it’s not fun to watch and invest the time necessary to watch the sausage-making.

    • Brad, thank you for commenting. I’m glad you were amused by the sausage analogy. I was a founding board member and eventually Chair of the Association of Fundraising Professionals Political Action Committee, the first philanthropy PAC in the USA. In that capacity, I met with a number of Congressional leaders. At times, it was encouraging while at other times it was downright depressing. One thing is definitely for certain: If we do not give voice to the issues facing the nonprofit sector, Congress and the President will be easily swayed by other interests. I hope folks will contact their Senators to urge passage of H.R. 644 in the Senate.

  2. It is unfortunate that the House did not see fit to expand this provision to include the ability of the donor to initiate split income gifts. It would be interesting to see what the projected tax revenues would be were this to be allowed. The amount of IRA money moved into trusts and CGAs could conceivably generate larger revenues than the current tax revenue received through RMD’s………..especially if gifts from 59 1/2 year old to 70 year old donors would be included in the provision.

    In addition, the demand for trust officers for financial institutions and gift planners for not-for-profits could very well make this a “jobs bill” and the best part is, it could very well pay for itself.

    • Scott, thank you for sharing your thoughts about further action that Congress should consider. Unfortunately, I suspect that there are very few members of Congress who completely understand our overly complex tax code and how charitable giving can be incentivized. My guess is that H.R. 644 is a starting, rather than ending, point for the conversation.

      Jason Lee, General Counsel at the Association of Fundraising Professionals is one of the leading members of the Charitable Giving Coalition, a diverse group of foundations and charities that has been advocating on behalf of the nonprofit sector. I encourage you, and anyone else, to contact Lee with any suggestions about charitable giving incentives and government policies affecting the nonprofit sector. This is a fluid time when the nonprofit sector can still have some influence on public policy.

  3. Even seeing the picture of making sausage is disturbing! Thanks for the update.

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