Exempt organizations-related provisions in Ways and Means Chairman’s tax reform proposal 

February 26: House Ways and Means Committee Chairman Dave Camp (R-MI) today released a comprehensive tax reform that would reduce tax income rates for individuals to 10% and 25%.

According to a Ways and Means release, there are proposals that would:


  • Prohibit the IRS from implementing proposed rules affecting 501(c)(4) organizations
  • Expand opportunities to make tax-deductible contributions past the end of the tax year; make permanent conservation easement incentives; simplify exempt organization taxes; and set a floor (instead of a cap) on the amount of donations that can be deducted

Other proposed measures

Other proposals include:


  • New individual and corporate rate structures - Reducing rates and collapsing individual income tax brackets into two brackets of 10% and 25% and reducing the corporate rate to 25%
  • Larger standard deduction - Inflation-adjusted standard deduction of $11,000 for individuals and $22,000 for married couples
  • Larger child tax credit - $1,500 per child, adjusted for inflation
  • Taxation of investment income - Long-term capital gains and dividends taxed as ordinary income, but exempting 40% of such income from tax
  • Repeal of alternative minimum tax (AMT) - For individuals, pass-through businesses and corporations
  • Modernize the international tax code
  • Permanent R&D incentive - Making permanent an improved research & development tax credit
  • Medical-related changes - Repeal of the medical device tax and repeal of the “medicine cabinet tax” (prohibits use of funds from tax-free accounts to purchase over-the-counter medication without first obtaining a prescription)

Documents

Read the 979-page text [PDF 2.10 MB] of the draft legislation.


Read text of a section-by-section summary [PDF 1.26 MB]


Read Joint Committee on Taxation (JCT) documents that examine the various provisions in the tax reform proposal, posted on the Ways and Means website.




For more information, contact:


Rick Speizman, Partner-in-Charge of KPMG's Washington National Tax Exempt Organizations Tax group

+1 (202) 533-3084





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