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| News Briefs |
Senators Target Charitable Deductions
07/28/2006
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Grassley and Baucus ask Bush to crack down on
abuses.
Two senators are urging President Bush to
crack down on charitable donation abuses. In a letter to the White House, Sen.
Chuck Grassley (R-Iowa) and Sen. Max Baucus (D-Mont.) write that some wealthy
Americans are taking charitable deductions in order to receive tax breaks, and
then retaining control of the money.
They cite the use of
supporting organizations as a method for individuals to make large donations
without legitimately committing funds to charities. Vague tax laws and federal
regulations, they argue, have opened loopholes for donors to manipulate
supporting organizations to their personal advantage.
Grassley and
Baucus are asking the president to support a bill calling for reform. In
addition to revising the rules for supporting organizations, the bill would seek
to ensure that funds contributed to public charities match the rate contributed
to private foundations. The tax structure would also be changed to give
charitable tax breaks only when evidence exists of charitable
benefit.
The new regulations would comprise a joint effort of the
IRS, Treasury Department and Office of Management and Budget. The senators hope
to have new legislation in place within the next six months.
—Tim Chan
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