FAITH IN CHARITY
Bush aide upbeat
Americans favor religion’s social role.

Most Americans believe religion can help improve society but are reluctant to link religion to politics, a new survey says. At the same time, the head of President Bush’s effort to boost the delivery of social services by religious groups says that plan won’t breach the constitutional wall separating church from state, or the integrity of religious groups that participate. Six in 10 Americans favor the idea of government funding for church groups to help the poor, but are split on whether groups should promote their religious messages, according a survey conducted by Public Agenda and funded by The Pew Charitable Trusts.

And while most Americans believe religious politicians would be more honest in office, the survey found, 58 percent says it’s wrong to consider a candidate’s religion when voting, and two-thirds could not name President Bush’s church affiliation. John DiIulio, director of the White House Office of Faith-based and Community Initiatives, told a conference on religion and social work that Bush’s plan aims to involve corporate America and big foundations in fighting poverty, Reuters reported April 1. The plan also is designed to correct a system that critics say ignores results while depending on secular groups to oversee funding for illiteracy, drug addiction, homelessness and other programs.
from http://www.nonprofitxpress.com

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GIFTS TO FRIENDS AND KIN, NOT CHARITIES, FACE TAXATION

A series of checks in amounts less than $10,000 that a woman gave to friends and relatives - but that were not cashed until after she died - must be included in her estate for tax purposes, the US Court of Appeals for the Second Circuit has ruled.

In Rosano v. United States, 99-6299, the appeals court found that the relation-back doctrine does not apply to gifts made to non-charitable donees where the donor has died before the cashing of the checks.

Generally speaking, under the legal fiction of relation-back doctrine, an act that was completed at one time is considered to have been completed at an earlier time. Judges employ the principle for policy reasons, such as fairness, efficiency or the desire to determine the true intention of a party. In the context of estate tax, courts have found that a charitable donation can be related back to an earlier date to reflect the intention of the donor. The policy behind that application of the doctrine is to encourage charitable donations, a purpose reflected in the tax code itself.

Senior Judge Ellsworth A. Van Graafeiland said the court was joining other circuits in finding that justifications for applying the relation-back doctrine to charitable gifts are not present where gifts are made to non-charitable donees.
New York Law Journal April 12, 2001

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TAX REDUCTION TARGETS VARY IN HOUSE AND SENATE

The promises made by political candidates going into the 2000 election are now beginning to be tempered by reality. These promises included tax bracket reduction and the elimination of the estate tax and the marriage penalty. Other topics included reform of the alternative minimum tax, allowing greater contributions to IRAs and to consider pension reform.

Action on a number of fronts has occurred with bills in process in the House. For example, HR 3 would reduce tax brackets, HR 6 would erase the marriage penalty and HR 8 would repeal the estate tax. The Ways and Means Committee (House of Representatives) passed a package of pension reform provisions, one which would increase IRA contributions from $2,000 per year to $5,000 per year. While nothing has been passed to date, hearings have been held and continue on AMT reform.

While members of both parties recognize the political value in tax reform and reductions, they also are facing the harsh reality of that the promises need to fit in a comprehensive bill.

A joint House - Senate Budget Committee met late last month in an attempt to resolve the "2 gallons of water in a one gallon container" issue. The House tentative tax cut target is $1.6 trillion -- the Senate target is slightly more than $1.2 trillion. Bush economic advisor Lawrence B. Lindsey has stated "I would urge them to keep in mind that there are many promises out there, and they've all got to add up to the number that is now going to fit in there."

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MARRIAGE RELIEF ACT

On a 282-144 bipartisan vote, the House approved H.R. 6, the Marriage Penalty and Family Relief Act of 2001. Sixty-four Democrats and one Independent joined all 217 Republicans to support the obviously popular bill. The House version doubles the 15% bracket for married couples. The bill also will increase the child credit from $500 to $1,000 per child. It now grants a "marriage bonus" to many couples in which there is a single earner or a one wage earner with much larger income than the other person. While the current bill was clearly popular, it does complicate the administration's goal of passing all of the various tax relief provisions within the $1.6 trillion target goal. In order to minimize the cost of the bill, the increased 15% bracket is phased in between 2004 and 2010.

BUSH AND CHENEY SUPPORT CHARITIES TO THE TUNE OF 20%

President Bush Gives 20% To Charity The White House released the tax returns of President and Mrs. Bush on April 13, 2001. From his taxable income of $744,682, President Bush paid taxes of $240,342.

However, he and Mrs. Bush contributed $143,300 to charities. This gift of almost 20% of his taxable income was distributed to several churches and charitable organizations. The Boy Scouts, the Girl Scouts, the Boys and Girls Clubs and other organizations received substantial gifts.

Vice President Cheney Gives Over 20% To Charity Vice President Cheney also released his tax return. His income in 2000 was $36,086,635 and he paid taxes of $14,295,058.

Vice President and Mrs. Cheney supported several charities with outright gifts of $41,646 and also transferred stock options valued at $7,800,000 to charity. The supported charities included the University of Wyoming, George Washington University and Capital Partners for Education, a charity that assists low-income children in the Washington area.
Internal Revenue Bulletin No. 2001-16 IRB 1 (April 16, 2001)

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The preceding is meant as general information and does not represent legal or tax advice. Individual circumstances vary - please consult your legal and tax advisors about your specific situation.
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