Congressman Proposes “Simple” Measure to Encourage IRA Gifts

Rep. Nick Lampson, Democrat of Texas, has taken a new tack in the campaign to persuade Congress to allow people to continue donating money from their individual retirement accounts to charities tax-free.

Mr. Lampson last month introduced the Charitable Tax Relief Act of 2007, H.R. 3596, which does just one thing: makes permanent the legislation that allows such donations when people are 70-1/2 or older, which is set to expire at the end of this year.

Unlike the other bill that has been introduced to extend the legislation, the Public Good IRA Rollover Act of 2007, it does not expand the benefit in any way.

“I’ve found that if you keep these things as simple as they can possibly be, things go through a little more quickly,” Mr. Lampson said.

The more-complicated bill would allow donors to give to additional entities such as donor-advised funds, lift a $100,000 cap, and allow people at age 59-1/2 to put their IRA funds into charitable remainder trusts and other types of gifts that produce income for the donor for several years, with everything left eventually to charity.

Mr. Lampson said he was not familiar with the details of that legislation, but that he wanted to introduce something that would not raise a lot of questions on the House floor. “We thought the best strategy was to make it permanent, period,” he said.

He said he wants to extend the IRA rollover provision, which was enacted as part of the Pension Protection Act of 2006, because it has been effective in encouraging people to make charitable donations they would not otherwise make.

Meanwhile, the Public Good IRA Rollover Act continues to attract co-sponsors, with about 15 new representatives and senators adding their names to the measure over the past month. The House bill, H.R. 1419, has 81 cosponsors.

The Senate version, S. 819, has 22 cosponsors.

What do you think? Should charities back the simple approach or continue to press for the more-generous measure? Has your charity received any IRA gifts? Click on the comments box below this posting to share your thoughts.