PUBLIC GOOD IRA ROLLOVER ACT (S. 1375)
The PG IRA introduced by Sen. Byron L. Dorgan (D-ND)
You can make it happen. Please reproduce this position paper and distribute it widely. Friends don’t let friends miss an opportunity to promote laws that will benefit charities and the people they serve.
THE PG IRA IN A NUTSHELL. Would allow tax-free IRA rollovers for outright charitable gifts and for life-income charitable gifts (unitrusts, annuity trusts, gift annuities, pooled income funds) that would pay fully taxable ordinary income to the IRA owner and/or spouse. When the life interest terminates, all the funds in the rolled-over IRA belong to the named charity or charities. The minimum age for an outright rollover is 70½, and 59½ for a life-income-gift rollover. The rollover is tax-free, but there is no charitable deduction. That’s the case for all IRA rollover proposals.
This paper was prepared by Conrad Teitell, 13 Arcadia Road, PO Box 299, Old Greenwich, CT 06870. Phone: (203) 637-4311; Fax: (203) 637-4572; E-mail: Conrad@taxwisegiving.com
THE PROBLEM. Although all the proposals described above are important, the total cost could well mean—as it has in the past—that nothing is enacted. While charities have varying priorities, virtually all charities believe that enabling donors to make charitable gifts of part or all of their IRAs would significantly increase charitable giving and begin to offset the reduction of charitable gifts that many believe will result from recent tax law changes that decrease and then eliminate the estate tax.
THE SOLUTION—ENACT THE PUBLIC GOOD IRA ROLLOVER ACT (S. 1375) NOW.
It is difficult enough to picture 1 billion dollars, let alone 62 billion. But some economists have given us a visual aid. A million dollars worth of thousand dollar bills makes a pile six inches high; a billion dollars worth of thousand dollar bills would stack up as high as the Washington Monument.
So it would take a pile of bills as high as 62 Washington Monuments to equal the amount that individuals have contributed to life-income plans to benefit charities.
There are many trillions of dollars currently in IRAs. Just imagine how many more Washington Monuments of thousand dollar bills will be given to charities after the PG IRA is enacted.
Make the case to Senate Finance Committee members (See list on page 4). If your Senator is a member of the Finance Committee, coalitions of charities in your state should seek a meeting with the senator and the senator’s tax aide. Make the trip to Washington or see your senator when he or she is back home. While faxes, e-mails and letters are occasionally helpful, they just don’t do the job.
You’ll get a meeting with your senator if it is requested and attended by top executive officers, influential board members and the senator’s political supporters.
Ask your senator on the Senate Finance Committee to co-sponsor the Public Good IRA (S. 1375) and to support a charitable IRA rollover provision if it is part of another tax bill being reported out of the Finance Committee.
My charity doesn’t have a senator on the Finance Committee. How can I help? Ask your senators to urge their colleagues who are committee members to support the PG IRA Rollover (S. 1375).
"I haven’t heard from (any/many) of my constituents on this," is a frequent comment of legislators on the IRA Charitable Rollover. That’s a good and legitimate rationale for Congressional inaction.
Act now! Time is short! The IRA Charitable Rollover has momentum. But if it’s not enacted this session, we’ll have to start from scratch next year with a new Congress.
SENATE FINANCE COMMITTEE MEMBERS AND STAFF
Max Baucus, D-MT – Chairman
Tax aides: Russ Sullivan, Mitchell Kent, Pat Heck, Maria Freese
Office #: 202-224-2651; Staff #: 202-224-5315; Fax #:202-228-3904
John Rockefeller IV, D-WV
Tax aide: Ellen Doneski
Office #: 202-224-6472; Staff #: 202-224-5663; Fax #: 202-224-7665
Tom Daschle, D-SD – Senate Majority Leader
Tax aides: Chuck Marr, Timothy Hogan
Office #: 202-224-2321; Staff #: 202-224-3809 (Marr), 202-224-9040 (Hogan); Fax #: 202-228-4538
John Breaux, D-LA
Tax aides: Rebecca Hawes, Lindsay Spiller
Office #: 202-224-4623; Staff #: 202-224-9741 (Hawes), 202-224-9749 (Spiller); Fax #: 202-228-2577
Kent Conrad, D-ND
Tax aides: Steve Bailey, Sarah Kuehl
Office #: 202-224-2043; Staff #: 202-224-2835 (Bailey), 202-224-0559 (Kuehl); Fax #: 202-224-7776
Bob Graham, D-FL
Tax aides: Bob Greenawalt, Dana Stefanelli
Office #: 202-224-3041; Staff #: 202-224-1536 (Greenawalt), 202-224-7912 (Steffanelli); Fax #: 202-224-2237
Jim Jeffords, Ind-VT
Tax aide: Jeff Fox
Office #: 202-224-5141; Staff #: 202-224-5262; Fax #: 202-228-0776
Jeff Bingaman, D-NM
Tax aide: James Dennis
Office #: 202-224-5521; Staff #:202-224-6490; Fax #: 202-224-2852
John Kerry, D-MA
Tax aides: Ryan McCormick, Jeff Hamond
Office #: 202-224-2742; Staff #: 202-224-7054 (McCormick), 202-224-4422 (Hamond); Fax #: 202-228-1411
Blanche Lincoln, D-AR
Tax aide: Mac Campbell
Office #: 202-224-4843; Staff #: 202-224-6384; Fax #: 202-228-1371
Charles Grassley, R-IA – Ranking Minority Member
Tax aides: Mark Prater, Ed McClellan, Brig Pari, Elizabeth Paris, Dean Zerbe, Diann Howland
Office #: 202-224-3744; Staff #: 202-224-5315; Fax #: 202-228-1703
Orin Hatch, R-UT
Tax aide: Evan Liddiard
Office #: 202-224-5251; Staff: 202-224-0619; Fax #: 202-224-6311
Frank Murkowski, R-AK
Tax aide: Alexander Polinsky
Office #: 202-224-6665; Staff #: 202-224-6665; Fax #: 202-224-5301
Don Nickles, R-OK
Tax aides: Hazen Marshall, Lee Morris
Office #: 202-224-5754; Staff #: 202-224-2708 (Marshall), 202-224-5754 (Morris); Fax #: 202-224-6008
Phil Gramm, R-TX
Tax aide: Steve McMillin
Office #: 202-224-2934; Staff #: 202-224-2934; Fax #: 202-228-2856
Trent Lott, R-MS – Senate Minority Leader
Tax aide: Keith Hennessey
Office #: 202-224-6253; Staff #:202-224-6253; Fax #: 202-224-2262
Fred Thompson, R-TN
Tax aide: Rachel Jones
Office #: 202 224-4944; Staff #: 202-224-4944; Fax #: 202-228-3679
Olympia Snowe, R-ME
Tax aide: Tom Geier
Office #: 202-224-5344; Staff #: 202-224-5344; Fax #: 202-224-1946
John Kyl, R-AZ
Tax aide: Laurence Wilcox
Office #: 202-224-4521; Staff #: 202 224-4521; Fax #: 202-224-2207
Craig Thomas, R-WY
Tax aides: Bryn Stewart, Mike Moran
Office #: 202-224-6441; Staff #: 202-224-6441; Fax #: 202-224-1724
In the aftermath of September 11, the best ways to communicate are by phone and fax. E-mail is generally a distant third. Congressional staff e-mail addresses are in a standard format—e.g., firstname.lastname@example.org.
PUBLIC GOOD IRA ROLLOVER ACT (S. 1375)
(Introduced by Sen. Byron Dorgan (D-ND)
To amend the Internal Revenue Code of 1986 to allow tax-free distributions from individual retirement accounts for charitable purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SEC. 1. SHORT TITLE.
This Act may be cited as the "Public Good IRA Rollover Act."
SEC. 2. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS FOR CHARITABLE PURPOSES.
(a) In General.—Subsection (d) of section 408 of the Internal Revenue Code of 1986 (relating to individual retirement accounts) is amended by adding at the end the following new paragraph:
"(8) Distributions for charitable purposes.—
"(A) In general.—No amount shall be includible in gross income by reason of a qualified charitable distribution from an individual retirement account to an organization described in section 170(c).
"(B) Special rules relating to charitable remainder trusts, pooled income funds, and charitable gift annuities.—
"(i) In general.—No amount shall be includible in gross income by reason of a qualified charitable distribution from an individual retirement account—
"(I) to a charitable remainder annuity trust or a charitable remainder unitrust (as such terms are defined in section 664(d)),
"(II) to a pooled income fund (as defined in section 642(c)(5)), or
"(III) for the issuance of a charitable gift annuity (as defined in section 501(m)(5)).
The preceding sentence shall apply only if no person holds an income interest in the amounts in the trust, fund, or annuity attributable to such distribution other than one or more of the following: the individual for whose benefit such account is maintained, the spouse of such individual, or any organization described in section 170(c).
"(ii) Determination of inclusion of amounts dis- tributed.—In determining the amount includible in the gross income of any person by reason of a payment or distribution from a trust referred to in clause (i)(I) or a charitable gift annuity (as so defined), the portion of any qualified charitable distribution to such trust or for such annuity which would (but for this subparagraph) have been includible in gross income—
"(I) shall be treated as income described in section 664(b)(1), and
"(II) shall not be treated as an investment in the contract.
"(iii) No inclusion for distribution to pooled income fund.—No amount shall be includible in the gross income of a pooled income fund (as so defined) by reason of a qualified charitable distribution to such fund.
"(C) Qualified charitable distribution.—For purposes of this paragraph, the term ‘qualified charitable distribution’ means any distribution from an individual retirement account—
"(i) which is made on or after the date that the individual for whose benefit the account is maintained has attained age 70½, except that with respect to any distribution to a trust, fund, or annuity referred to in subparagraph (B) which is made on or after the date that the individual for whose benefit the account is maintained has attained age 59½, and"
"(ii) which is made directly from the account to—
"(I) an organization described in section 170(c), or
"(II) a trust, fund, or annuity referred to in subparagraph (B).
"(D) Denial of deduction.—Qualified charitable distributions shall not be taken into account in determining the deduction under Section 170."
(b) Effective Date.—The amendment made by this section shall apply to taxable years beginning after December 31, 2001.
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