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Walker Re-Introduces LIFT for Charities Act to Maintain Non-Filing Tax Status for Charities and Churches

March 6, 2019
Press Release

WASHINGTON, D.C. –  U.S. Representatives Mark Walker (R-N.C.) and Tom Suozzi (D-N.Y.) yesterday re-introduced the Lessening Impediments From Taxes (LIFT) for Charities Act. This bi-partisan and bi-cameral legislation would eliminate a measure that requires charities, churches, and traditionally tax-exempt organizations to pay federal taxes on provided employee benefits.

"Churches and charities serve on the frontline of our battle against the generational cycles of poverty and the traps of government dependence," Walker said. "Washington should ensure their work in our communities is not restricted by unnecessary taxes and strenuous compliance processes. The LIFT for Charities Act will maintain that non-profits and places of worship remain uninhibited by federal burdens."

"Last year’s tax bill placed a new tax on religious institutions and nonprofits. That’s simply wrongheaded." Suozzi said. "That is why I am proud to co-lead this bipartisan bill with my colleague so that nonprofits and places of worship can continue their important work without an unnecessary financial burden."

Examples of employee benefits that would be subject to taxation if the LIFT for Charities Act is not adopted include parking spots, provided meals, and transportation benefits. These benefits are critical to the mission of the organizations; for example, many Goodwill centers offer transportation to employees.

Another additional impediment to non-profit organizations without the passage of the LIFT for Charities Act is compliance burdens and fees. These organizations traditionally have not been required to file returns with the Internal Revenue Service. Without the passage of this legislation, these organizations will spend millions collectively on IRS compliance, further diminishing the resources they are able to spend on serving communities.

You can read the full text of the legislation here.

U.S. Representatives Randy Weber (R-Texas), Doug Lamborn (R-Colo.), Jeff Duncan (R-S.C.), Matt Gaetz (R-Fla.), and Jody Hice (R-Ga.) are also co-sponsors on this bill. 

U.S. Senators James Lankford (R-Okla.) and Chris Coons (D-Del.) re-introduced the Senate companion last week.

"Tax reform was designed to help simplify the tax code and reduce burdens on small businesses, not add burdens on nonprofits," said Lankford. "The legislation introduced today would eliminate this problem once and for all."

"As co-chairs of both the National Prayer Breakfast and the Senate Prayer Breakfast, Senator Lankford and I believe that we have a moral obligation to support our neighbors most in need, and nonprofits play an essential role in doing just that," said Coons.

Tim Delaney, President, and CEO of the National Council of Nonprofits, the largest network of charitable nonprofits in the US, said: "Taxing tax-exempts is the very definition of an oxymoron. But worse, this tax is also illogical, unworkable, and unfair. Almost everyone in Congress acknowledges it was a mistake, an error, and this legislation shows there is bipartisan support for its repeal. Hundreds of thousands of nonprofits, houses of worship, and foundations will be forced to divert money away from their missions to make tax payments soon unless this tax is repealed – retroactively – in the coming weeks."

"The Council supports the reintroduction of this bill, which would eliminate the tax imposed on nonprofits, foundations, and charities for offering transportation benefits to their employees. We have heard from our members, whose mission is to serve the needs of their communities, about the burdens both financially and administratively that these provisions are now causing our members and their charitable grantees and will continue if not repealed. It is our hope that this bill is acted upon quickly to provide needed relief to the sector," said Council on Foundations Interim President and CEO Gene Cochrane.

"If left unaddressed, the new tax on transportation fringe benefits will divert an average of $12,000 away from each nonprofit organization's mission, hurting the individuals and communities who need help the most," said Daniel J. Cardinali, President, and CEO of Independent Sector. "The LIFT for Charities Act is a welcome recognition that this burden is unacceptable, and we urge Congress to act on it swiftly."

In November 2017, Lankford and Walker also introduced the Universal Charitable Giving Act in both the Senate and House, which would create a universal charitable deduction in addition to the standard deduction for individuals and married couples that do not itemize.