Food Bank Requests Guidance on Charitable Donations of Inventory

July 31, 2020

Michael J. Desmond, Esq.
Chief Counsel
Internal Revenue Service
1111 Constitution Avenue NW
3026 IR
Washington, DC 20224

David Kautter, Esq
Assistant Secretary of Tax Policy
U.S. Department of the Treasury
1500 Pennsylvania Avenue NW
1037-B MT
Washington, DC 20220

Re: Section 170 (e)(3) Charitable Contributions

Dear Messrs. Desmond and Kautter:

Hawaii Foodbank would like to express our support for the requests by Miller & Chevalier Chartered (i) in their April 1, 2020 letter that the pending 2019-2020 Priority Guidance Plan project regarding charitable contributions of inventory under Section 170(e)(3) (the “Section 170(e)(3) Project”) be expedited, and (ii) in their July 1, 2020 letter that the Section 170(e)(3) Project be retained on the 2020-2021 Priority Guidance Plan.

Each year, food banks in America endeavor to keep up with the growing need to feed America's hungry. According to the USDA's 2019 Household Food Insecurity in the United States report, more than 37 million people in the United States struggle with hunger. As the coronavirus pandemic decimated the U.S. economy, the estimates of the number of individuals who may experience food insecurity has ballooned to 54 million, including 18 million children.

As a Feeding America partner, Hawaii Foodbank works with local and national retailers, manufacturers, wholesalers, growers and the public to provide for Hawaii's hungry. Hawaii Foodbank helps feed 1 in 8 people in Hawaii, including more than 53,000 children. Hawaii Foodbank distributed more than 12 million pounds of food, including 3 million pounds of fresh produce on Oahu and Kauai in 2019 alone.

Hawaii Foodbank receives 76% of our food donations from our partners in retail, manufacturing, wholesaling, and growing, as well as the public. It is absolutely critical to our organization and the children and families of Hawaii that these partners can continue to provide food for our community.

Due to the severe economic strains of the coronavirus, we are aware that these partners are struggling to continue to donate at the levels required to sustain our island community. Through discussions with our corporate partners, we understand that the Section 170(e)(3) food donation tax incentive is key to a consistent supply of food to non-profits helping people in need. Clarity in the treatment of this tax incentive is crucial in offsetting the cost of sorting, packaging, storing and distributing the food that is donated daily to the Hawaii Foodbank.

Clarity of this tax deduction, as proposed, is critical to controlling the cost of food donations for my major food donors and it is therefore critical to us at Hawaii Foodbank and all of the people we serve. Solving this tax issue will enable us to secure food during the pandemic and for future generations.

We appreciate your consideration of this important request.

Sincerely,

Ron Mizutani
Hawaii Foodbank
Honolulu, HI