- June 2010
- Congress Tries Again to Extend IRA Tax Incentive, Ease Pension Rules
- House Approves Quick Tax Breaks for Chile Donations
- Financial Overhaul Measure Being Considered by the Senate
- Senators Call On Boys & Girls Clubs to Justify Pay and Spending
- Muslim Groups Urge Obama to Ease Giving Restrictions
- Senator Questions Colleges’ Use of Tax-Exempt Bonds and Foundation Tax Proposal
- Proposed Donor Disclosure Requirements Concern Nonprofits
- US Government Awards Millions for AmeriCorps Expansion
- Legislation Introduced in House to Improve Federal Policy Toward Charities
- Supreme Court Upholds Law Prohibiting Aid to Terrorist Groups
- Boston to Seek Bigger Payments from Nonprofit Groups
- IL Supreme Court Rules Against Nonprofit Hospital in Property Tax Case
- CA Lawsuit Could Impact Health Care Fund Raisers
- Equity Firm Buys Mass. Catholic Hospital Chain
- OK Attorney General Opens Formal Investigation of Charity
- Corruption Alleged at NY Theatre Group
- NJ Aims to Limit State Pay for Nonprofit CEO’s
- Two MA Hospital’s Senior Executives Face Legal Scrutiny
- Nonprofit Suing State for Violating Freedom of Speech
- Strapped MA Towns Tax Catholic Properties
- GA Charity Challenges Tax Penalty for Fund-Raising
- IRS Notes Abuse of Charitable Deductions Tax Schemes
- IRS Continues Its Focus on Non Profit Governance Matters
- IRS Allows Small Charities a Reprieve from Tax-Filing Deadline
- IRS Concerned with Colleges’ Salaries and Income Reporting
- Postal Service Seeks to Reduce Delivery and Increase Rates in 2011
- All Pages
Senator Questions Colleges’ Use of Tax-Exempt Bonds and Foundation Tax Proposal
Senator Charles Grassley (R – IW) has set his sights on a longstanding cornerstone of colleges’ financial practice – paying for new and renovated buildings by borrowing money with tax-exempt bonds.
This attention comes as a result of a just released report from the Congressional Budget Office which questions the merits of allowing nonprofits to rely on taxpayer-subsidized debt, while they also benefit from investing their assets to earn more than what they pay out in interest on the debt. The study estimates that allowing colleges and universities to borrow using tax-exempt debt will cost the federal government about $5.5-billion in revenue in 2010.
Grassley, the senior minority member of the Senate Finance Committee, who requested this analysis as part of a broad look at tax-exempt organizations, said the report raises serious questions for taxpayers about universities going into debt when they have money in the bank. He is now considering whether to propose any changes in the law in response to the report’s findings.
On a separate issue, Grassley is asking the Council on Foundations for information about the need for a proposed change in the way foundations pay excise tax on their net investment income – specifically, eliminating the current two-tier excise tax system and replacing it with a flat rate of less than 2%. Grassley wants this change to be considered in the context of “larger reform” which looks into the topic of how many private foundations actually pay the investment income excise tax.