EdChoice on Senate vote today regarding IRS charitable contribution rule

INDIANAPOLIS—EdChoice, a national nonprofit organization that promotes state-based educational choice programs, released the following statement from Vice President of Legal Affairs Leslie Hiner on the vote today on Senate Joint Resolution 50.

The resolution expressed Congressional disapproval of an Internal Revenue Service rule regarding charitable contribution and estate tax deductions when a taxpayer receives or expects to receive a corresponding state or local tax credit. The IRS rule has slowed giving to charities funding school choice scholarships for K-12 students. The resolution failed by a 43-52 vote.

“Children receiving school choice scholarships from tax credit scholarship programs would have inadvertently benefited from a bill authored by Senate Minority Leader Chuck Schumer (D-NY).

“Today, the U.S. Senate rejected the resolution, which would have gutted a Treasury Department and IRS rule adopted this summer enforcing and clarifying federal deductibility of charitable contributions. The rule ended so-called workarounds created by states with high state and local taxes as a way for high-income individuals to avoid the new tax law limiting federal deductibility of state and local taxes over $10,000. Unfortunately, the rule also negatively impacted donations to charities funding scholarships for children to access safe K-12 schools where they can learn and thrive.

“We encourage Treasury and the IRS to reconsider their rule adopted this year, and in light of Sen. Schumer’s bill, craft a revised rule that will clearly benefit charities that provide scholarships for children, aid to rural hospitals, and support for land preservation nonprofits, among others. We urge Treasury and the IRS to clearly distinguish these necessary state programs providing public benefits through the generosity of private donors from the callous state-created tax dodging schemes for high wealth individuals in states that have chosen to overtax their citizens at state and local levels.”