Panel on Nonprofits Releases Report
The "Panel on the Nonprofit Sector" has released its report on ways to toughen regulations on charitable organizations. The entire PDF can be downloaded here.
The Senate Finance Committee has been waiting for this report before pressing forward with new legislation.
When it comes to regulating conservation easement donations, the panel is recommending:
-Strengthen the definition of a qualified appraisal and a qualified appraiser.
-Expand penalties on taxpayers who claim inflated donations
-Impose penalties on appraisers if the appraisal exceeds the correct value of the property by 50% or more
-Mandate electronic filing, and require the donor to complete information on the appraised value before the charity can say that it has received the property.
-Enact laws allowing that deductions for easements can be reduced if the value of surrounding properties owned by the donor or his/her relatives increases because of the donation.
-Allow donations only to qualified charities with a primary purpose of environmental protection that "has a commitment and the resources to manage and enforce the easement restrictions with appropriate procedures for certifying that a charity meets this definition".
- Impose penalties on charities that fail to enforce easements, with a waiver available when a change in conditions on surrounding property makes it impossible.
- The IRS should require charities to certify annually on its Form 990 that it has established written procedures for monitoring easements and has adequate resources to enforce them.
- File a list of all donations of easements it holds, listing location, acreage, purpose of easement, year it was donated and whether it has been modified.
All in all, pretty sensible recommendations. It will require a professionalization of easement appraisals, and gives some teeth to rules against cheating. It will mean more paperwork for trusts, but it seems as though not any more than would be expected. A good organization should already have a database of existing easements, and be performing at least annual monitoring, so it should be able to keep up. And by giving the appraiser a 50% cushion, there's enough leeway so that appraisers won't be scared off from even attempting to handle easement business. It all seems like good advice.
The Senate Finance Committee has been waiting for this report before pressing forward with new legislation.
When it comes to regulating conservation easement donations, the panel is recommending:
-Strengthen the definition of a qualified appraisal and a qualified appraiser.
-Expand penalties on taxpayers who claim inflated donations
-Impose penalties on appraisers if the appraisal exceeds the correct value of the property by 50% or more
-Mandate electronic filing, and require the donor to complete information on the appraised value before the charity can say that it has received the property.
-Enact laws allowing that deductions for easements can be reduced if the value of surrounding properties owned by the donor or his/her relatives increases because of the donation.
-Allow donations only to qualified charities with a primary purpose of environmental protection that "has a commitment and the resources to manage and enforce the easement restrictions with appropriate procedures for certifying that a charity meets this definition".
- Impose penalties on charities that fail to enforce easements, with a waiver available when a change in conditions on surrounding property makes it impossible.
- The IRS should require charities to certify annually on its Form 990 that it has established written procedures for monitoring easements and has adequate resources to enforce them.
- File a list of all donations of easements it holds, listing location, acreage, purpose of easement, year it was donated and whether it has been modified.
All in all, pretty sensible recommendations. It will require a professionalization of easement appraisals, and gives some teeth to rules against cheating. It will mean more paperwork for trusts, but it seems as though not any more than would be expected. A good organization should already have a database of existing easements, and be performing at least annual monitoring, so it should be able to keep up. And by giving the appraiser a 50% cushion, there's enough leeway so that appraisers won't be scared off from even attempting to handle easement business. It all seems like good advice.
posted by Pat Burns | 11:13 AM
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