President Obama released his Budget of the United States Government, Fiscal Year 2016 and the general explanation of the revenue proposals.  The revenue proposals contain several items of interest to tax-exempt organizations.  The proposals would:

  • Make e-filing mandatory for all Form 990 series returns and for Form 8872 (reporting of certain political contributions and expenditures)
  • Impose a $5,000 penalty for failure to comply with e-filing requirements
  • Eliminate the two-tier structure of the excise tax on private foundation net investment income, and replace it with a single tax rate of 1.35%
  • Increase the standard mileage rate for automobile use by charitable organization volunteers, currently 14 cents per mile, to the same rate set by the IRS for purposes of the medical and moving expense deduction, which is currently 23 cents per mile
  • Disallow the deduction for charitable contributions that are a prerequisite for purchasing tickets to college sporting events
  • Consolidate contribution limitations by keeping the charitable deductions limit at 50% for contributions of cash to public charities, while making all other contributions subject to a single deduction limit of 30% of the taxpayer’s contribution base
  • Extend the carry forward period for contributions in excess of charitable contribution limitations from five to 15 years
  • Impose the Fair Share Tax (FST) for taxpayers with adjusted gross income of over $1 million, the FST is 30% of adjusted gross income less a credit equal to 28% of qualified charitable contributions after the overall limitation on itemized deductions