PSW Policy Info Session: Hearing on Proposed DAF Regulations
The IRS and Treasury Department scheduled a public hearing for May 6 on proposed regulations that provide definitions for donor-advised funds (DAFs), donors, distributions, and other key terms.
Philanthropy Southwest and Integer will convene a virtual information session on March 25 at 2 pm CT / 1 pm MT to share more information ahead of the public hearing and the April 5 deadline for potential speakers to submit an outline of their testimony. PSW members can register for the information session here.
As you may recall, the proposed regulations elicited over 150 stakeholder comments, with most elevating concerns that the proposed regulations could have a chilling effect on charitable giving through DAFs. The public hearing creates another opportunity for Treasury and IRS officials to receive feedback from stakeholders and interested parties.
Those interested in providing oral testimony in person or via telephone during the public hearing must follow the instructions in the hearing notice to submit an outline of their speaking topics by April 5. Instructions for persons to obtain approval to attend the hearing, either in person or via telephone, are also in the hearing notice.
Washington Update: Budget, Government Funding, Tax, Oh My!
Last week, the White House released its FY25 budget request and included two repeat provisions directly impacting philanthropy. One would bar private foundations from counting distributions to DAFs toward their 5 percent minimum payout requirement unless funds are distributed from the DAF by the end of the following year, and a second would exclude payments to disqualified persons from counting toward the mandatory 5 percent payout, largely impacting family foundations. It did not address the charitable deduction or extending it to non-itemizers.
The President’s Budget is viewed as a policy “wish list” that outlines the White House’s spending and tax priorities. The $7.3 trillion budget includes several familiar tax provisions targeting wealthy individuals and corporations, like raising the corporate income tax rate and imposing a minimum tax on billionaires. While unlikely to gain traction in its current form, lawmakers could seek to implement proposals from past presidential budgets during tax reform in 2025.
Meanwhile, Congress has largely focused on addressing government funding since returning to Washington in late February. Lawmakers passed half of their FY24 spending bills last week and are expected to work to clear the remaining bills by March 22, when funding for those agencies expires. The bipartisan tax bill negotiated between taxwriting Chairs Ron Wyden (D-OR) and Jason Smith (R-MO) remains stalled amid concerns its Child Tax Credit (CTC) measures disincentivize work, and it’s unclear whether it could move alongside government funding later this month. Whether or not lawmakers can resolve the current stalemate over the tax bill could provide a sign of how simple or challenging advancing major tax reform next year will be. Stay tuned.
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