The Catholic University of America

CUA Law professor Roger Colinvaux blogs about the Protecting Americans from Tax Hikes Act signed into law by the President on December 18 in the Nonprofit Law Prof Blog. See below. 
 

Extenders Made Permanent in PATH Act

Date: December 21, 2015

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We continue to blog about the Protecting Americans from Tax Hikes Act signed into law by the President on December 18. Today a note on aspects of the tax extender provisions affecting nonprofits.

The big news is that Congress has removed an annual headache for many taxpayers and nonprofit organizations by removing the expiration dates for several provisions that have been subject for years to the whims and uncertainties of the annual legislative process (sections 111-115 of the Act, explained here, pages 12-25). These special charitable tax breaks are for contributions of conservation easements, distributions from an IRA to charity, and business contributions of food inventory. Two other provisions relate to contributions by S Corporation shareholders and the general (nontaxation) of payments by controlled subsidiaries of a charity to the (parent) charity.

Much as it is easy to welcome certainty, in some ways it was appropriate for these tax provisions to be up for renewal every year, just like a regular appropriation. When tax expenditures like these become non-expiring (a.k.a. permanent), there is a dark side: the spending they represent becomes more like entitlement spending, a fixture of the tax code. And even worse (or better, depending on your point of view), as a tax expenditure, they escape notice in the regular budget as “spending,” making them more immune to change.
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Click here to view the blog.

 

 

Roger Colinvaux  

Professor Roger Colinvaux's
Areas of Expertise

Tax-Exempt Organizations

Charitable Deduction

Political Activities of Nonprofits

For additional information about our professors' areas of speciality, see Professor Colinvaux's faculty page.