Grassley is looking for revenue-raisers to offset the $50 billion needed to extend the tax cuts currently scheduled to expire at the end of the year. He wants to combine revenue offsets from the Senate version of last yearÕs corporate tax bill that died in conference with new offsets identified last week in the Joint Committee on Taxation (JCT) report, including tightening deductions for the charitable donations and rules for tax-free bonds.
The Joint Committee on Taxation has issued the report suggesting ways to close the federal budget gap by picking up some of the revenue from tax-exempt entities. According to the Committee, the section on exempt organizations could pick up nearly $7 billion over the next ten years.
The proposals include:
- denying exempt status for organizations that fail a five-year review for renewal;
- imposing a termination tax on exempt organization conversions;
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taxing participation in abusive tax shelter deals;
- extending intermediate sanctions;
- increasing excise taxes on private foundations;
- limiting deductions for conservation easements and gifts of clothing, household goods and other property;
- increasing penalties for failing to disclose tax returns;
- expanding the base of the excise tax on private foundation investment income;
- limiting the exempt status of fraternal beneficiary societies that provide commercial-type insurance;
- cracking down on credit counseling organizations.
Grassley, chairman of the Senate Finance Committee, which was already seeking to reform charitable organizations, says the recommendations Ōshould help to remove the rose-colored glasses that a lot of people use to view tax-exempt organizations.Ķ