Legislative Status: August 9, 2007

Update from Congress:  Before adjourning for the August recess, both the House and Senate introduced identical versions of the Technical Corrections Act to last year’s Pension Protection Act, known as the Pension Protection Technical Corrections Act.  To read the legislative language of the bills, click here and in the “Search Bill Text” box, enter “Pension Protection Technical Corrections Act of 2007”. 

The bill includes only one provision which relates to tax-exempt organizations.  It deals with tax-free distributions from IRAs for charitable purposes.  The provision, which is Title XII in the bill, provides an exclusion from gross income for otherwise taxable IRA distributions from a traditional or a Roth IRA in the case of qualified charitable distributions. 

It appears that this provision is the only tax-exempt provision on which there was consensus at this point.  We expect there could be additional efforts to “fix” the tax-exempt sections of the PPA once the Ways and Means Committee has reviewed the comments submitted by the tax-exempt community. 

To view the Joint Committee on Taxation’s summary of the Pension Protection Technical Corrections Act, click here. 

Update on the Pension Protection Act:  As you know, the Alliance for Charitable Reform hand-delivered ACR members’ comments to the charitable provisions of the Pension Protection Act of 2006 (PPA) to the House Ways and Means Oversight Subcommittee this week. We understand the response to the Subcommittee’s request was significant and the Subcommittee was appreciative of all submissions.  

More on the PPA:  The Tax Section of the American Bar Association has submitted comment letters to both the Internal Revenue Service (IRS) and the House Ways and Means Oversight Subcommittee on the effects of the Pension Protection Act of 2006 (PPA).   

To view the section’s August 1st letter to the IRS, please click here.  To view the ABA’s August 6th letter to the House Ways and Means Oversight Subcommittee, please click here. 

Also on Capitol Hill: Chairmen Max Baucus and Charles Rangel announced that Edward Kleinbard, formerly a partner at Cleary Gottlieb Steen & Hamilton LLP, will join the Joint Committee on Taxation (JCT) as its chief of staff, beginning in September.   

The JCT has a very powerful and important role in helping to craft tax policy. The JCT is an advisory committee to Congress, and specifically to the Senate Finance Committee and the Ways and Means Committee.  In addition, the JCT is charged with monitoring federal tax policy and estimating the impact of proposed changes to tax policy. The Joint Committee is closely involved in every aspect of the tax legislative process, from the development and analysis of tax proposals for Members of Congress to the drafting of tax bills, estimates of all revenue legislation considered by the Congress, and investigations of various aspects of the Federal tax system.

To view the press release from the Chairman Max Baucus, please click here. 

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