Action needed: IRS considering rule change that would suppress conservation
The IRS and U.S. Treasury Department are considering a rule change to federal deductions available to people who donate to charitable organizations and then receive state or local tax credits. This includes the donation of conservation easements and even land.
These reductions would remove or reduce an important incentive for donors and would slow the rate of land conservation. Our friends at the Land Trust Alliance submitted comments on behalf of the land conservation community on the proposed regulations (read them here). You can help: Please use our suggested points below and submit a comment opposing this change by the deadline, Thursday, October 11.
You can use the points below as starting points for your comment at regulations.gov:
- It’s important to encourage conservation through the donation of conservation easements, land, and monetary gifts to charitable conservation organizations.
- This proposed rule change goes against the intent of Congress by reducing the federal tax incentive available to those who make contributions for land conservation purposes, including donations of
conservation easements made a permanent part of the tax code by Congress in 2015, in full knowledge of the various state and local incentives for conservation. - The proposed rule would replace an existing system, where states provide charitable incentives without affecting a donors’ federal tax liability, with a new system that would create great inequities in the treatment among different states and of individual taxpayers who are making charitable donations.
- Please do not reduce the federal deductions for charitable contributions to land conservation organizations; this rule change would remove an important incentive for conserving our nation’s valuable natural and working lands.
More info from the Land Trust Alliance:
If the IRS and U.S. Treasury Department enact the proposed regulations, taxpayers would have to deduct the value of the state tax credit (or state tax deduction in some cases) from their federal deduction. For example, if a state provides a 70 percent tax credit for donations to eligible entities, whether government run or a charitable nonprofit, and the taxpayer makes a $1,000 donation to an eligible entity, the taxpayer receives a $700 state tax credit. The taxpayer must then reduce the $1,000 contribution by the $700 state tax credit, leaving an allowable contribution deduction of $300 on the taxpayer’s federal income tax return….
This rule change would change prior law that permitted full deduction of charitable donations, which also allowed taxpayers to apply a tax credit based on that donation to reduce state taxes.
Please submit your comments electronically via regulations.gov no later than October 11. Federal rule makers need to understand how the proposed regulations would affect the important work of land trusts and other conservation groups across the country.