Private Foundations

Table of Private Foundation Law Tax Reform Proposals

The principal source of specific tax reform proposals at the present is the proposed Tax Reform Act of 2014, introduced by the then-Chairman of the House Committee on Ways and Means Dave Camp (who has retired from Congress). This proposal (Camp Proposal) was never introduced as a bill; it was published, on February 26, 2014, as a discussion draft. Tax reform proposals are in the Administration's proposed budget for fiscal year 2016, in tax law revision legislation that is pending in the current (114th) Congress, and in the July 2015 Report of the Business Income Tax Working Group to the Senate Committee on Finance (Working Group Report).

Tax reform proposals directly affecting the tax law pertaining to private foundations and assorted related proposals are inventoried below.

1. Tax Reform Proposals Directly Affecting Private Foundation Law
   1. Tax on Net Investment Income
      1. Present law: Private foundations and certain charitable trusts are subject to a 2-percent excise tax on their net investment income (Internal Revenue Code of 1986, as amended, section (IRC §) 4940(a)). An organization may reduce the excise tax rate to 1 percent by meeting certain requirements regarding distributions to qualifying tax-exempt organizations during a tax year (IRC § 4940(e)).
      2. Proposal: This excise tax on net investment income would be reduced to a single rate of 1 percent (Camp Proposal § 5204).
      3. Proposed America Gives More Act (H.R. 644), which ...