Paul L. Caron

Wednesday, January 20, 2010

Haiti Tax Relief

The House today unanimously approved by voice vote H.R. 4462, A Bill to Accelerate the Income Tax Benefits for Charitable Cash Contributions for the Relief of Victims of the Earthquake in Haiti.  Here is the Joint Committee on Taxation's Technical Explanation (JCX-2-10):

The provision permits taxpayers to treat charitable contributions of cash made after January 11, 2010, and before March 1, 2010, as contributions made on December 31, 2009, if such contributions were for the purpose of providing relief to victims in areas affected by the earthquake in Haiti that occurred on January 12, 2010. Thus, the effect of the provision is to give calendar-year taxpayers who make Haitian earthquake-related charitable contributions of cash after January 11, 2010, and before March 1, 2010, the opportunity to accelerate their tax benefit. Under the provision, such taxpayers may realize the tax benefit of such contributions by taking a deduction on their 2009 tax return.

The provision also clarifies the recordkeeping requirement for monetary contributions eligible for the accelerated income tax benefits described above. With respect to such contributions, a telephone bill will also satisfy the recordkeeping requirement if it shows the name of the donee organization, the date of the contribution, and the amount of the contribution. Thus, for example, in the case of a charitable contribution made by text message and chargeable to a telephone or wireless account, a bill from the telecommunications company containing the relevant information will satisfy the recordkeeping requirement.

Howard Gleckman (Urban Institute) objects to the bill in Don’t Give Special Tax Breaks for Haiti Relief:

In a rare bit of bipartisanship, Democrats and Republicans on the House Ways & Means Committee have introduced legislation to allow people who contribute to Haiti relief in 2010 to take a tax deduction against last year’s taxes. Well-intentioned as it may be, the measure is wrong-headed and likely to create more problems than it solves.

Joe Kristan (Roth & Co.) agrees in Haiti Earthquake Rattles the Tax Law:

When something bad happens, politicians reflexively reach for the tax code. They should put it down and back away slowly, ... As bad as Haiti is, it's not the first disaster ever, and one more change to the tax law isn't going to solve that sad country's problems. Of course, the proposed changes are more about politicians making a show of concern than actually accomplishing anything.

Update:  The Senate unanimously approved the bill on Thursday.

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