What We're Tracking in DC
Comments on Proposed DAF Regulations Submitted
Last week, we submitted our comments to Treasury and the IRS about proposed donor advised fund (DAF) regulations, along with more than 140 foundations joining our letter. We discussed:
- Our appreciation for provisions that will improve the giving environment, including allowing DAFs to use equivalency determination and the scholarship and disaster fund DAF exceptions.
- Sector concerns about the breadth of the new definitions of a DAF and donor advisor, including the regulations’ potential imposition of additional regulatory requirements on other types of charitable funds and giving.
- Our members’ concerns about the short implementation timeline of these proposed regulations.
- Additional potential burdens that might create a chilling effect for charitable giving.
Overall, we emphasized the importance of DAFs as a tool that democratizes philanthropy and that has become a vital component of the charitable infrastructure. Thank you to all who provided input, feedback, and suggestions as we developed these comments.
Elsewhere in DC:
- IRS Commissioner Danny Werfel testified in front of the House Ways and Means Committee last week. While the hearing primarily focused on the current tax filing season and the Inflation Reduction Act’s increase in IRS funding, nonprofits did come up briefly: Rep. Claudia Tenney (R-NY) raised the issue of the IRS’s response to allegations of nonprofits providing material support to foreign terrorist organizations.
- The Ways and Means Committee advanced the End Zuckerbucks Act (H.R.1725) out of committee. The bill, which prohibits nonprofits from funding election administration, has not yet been introduced in the Senate.
- Funding for some federal agencies expires on March 1, and a path forward is unclear. The House Freedom Caucus is calling for a year-long funding resolution that would trigger 1% spending cuts across the government. It is unlikely such a resolution would see the broad bipartisan support it needs for passage, meaning we are once again on shutdown watch.
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