Toward More Simple and Effective Giving: Reforming the Tax Rules for Charitable Contributions and Charitable Organizations

Although our tax code contains incentives for charitable giving, numerous impediments weaken these incentives or add undue complexity, contrary to the underlying principle. Many of these impediments also create significant complications for the taxpayer, the charitable sector, and the IRS itself. This paper highlights problems with limitations on the charitable deduction, the valuation of appreciated property donated to private foundations, and the excise tax on private foundations. In addition, the paper proposes a package of simplifying reforms and includes suggestions for promoting charitable giving such as allowing donations to be deducted up to April 15 of the following year.