Proposed Tax Reform Bill Impacts Philanthropy and Tax-Exempt Organizations

On November 2, 2017, House Ways and Means Committee Chairman Kevin Brady (R-TX) introduced H.R. 1, the “Tax Cuts and Jobs Act” (the “Bill”). At over four hundred pages, the Bill promises substantial changes to the Internal Revenue Code of 1986, as amended (the “Code”). Although the Bill could have significant and long-term impact for most U.S. taxpayers, we highlight below certain key provisions of particular interest in the worlds of philanthropic giving and tax-exempt organizations. We do not address provisions of broad, general applicability (such as the proposed phase-out of the estate tax, the proposed increase in the standard deduction, and the proposed elimination of the so-called “Pease limitation” on itemized deductions), even though such changes in the law obviously could have an impact on charitable giving. It is unclear which provisions of the Bill, if any, will ultimately become law. The Senate has not released its own tax proposal, and once it does the two bills will likely need to go to conference to arrive at a bill agreeable to both chambers. We will continue to monitor the Bill as it makes its way through Congress. The changes below would go into effect for taxable years beginning after December 31, 2017.

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