Lawmaker Asks Treasury to Clarify Aspects of Charitable Giving Incentives Under Pension Law

As an author of the charitable giving incentives enacted as part of the Pension Protection Act this year, I was deeply concerned by an article that recently appeared in the New York Times (Stephanie Strom, "Tax Break to Encourage Giving Is Creating Confusion Instead," Dec. 3, 2006, A24). The article claims that there is a great deal of misinformation and a general lack of knowledge about a key charitable incentive in the law, which allows individuals age 70 1/2 and older to donate tax-free up to $100,000 from their individual retirement accounts directly to the charity of their choice in years 2006 and 2007. The article explains that some of the banks and brokerage houses that manage individuals' retirement accounts are resisting direct transfers of donated funds to charity stating that, "[t]he reasons for the custodians' reluctance include ignorance of the measure . . . and lack of guidance from the Internal Revenue Service."

As the lead sponsor of the Charitable Giving Act, I believe that the health of the charitable sector is vital to our nation's well-being. We can all agree that potential donations to soup kitchens, churches, schools, and shelters should not be held up because of ignorance of the law. It is important that those who want to make charitable donations this year are given accurate information by their financial institutions so that they can take full advantage of this tax incentive. I request that the Department of the Treasury or the Internal Revenue Service provide notice to financial institutions of the new law, and provide details about how to facilitate these donations before the year's end.