News Release
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Charities Oppose Caps on Charitable Deductions
March 2, 2005 |
Rockville, MD —
Goodwill Industries International, the Salvation Army, the Society of
St. Vincent de Paul, and Volunteers of America oppose federal
recommendations to cap charitable deductions for clothing and household
goods donations to $500.00 per taxpayer, per tax year. According to the
Joint Committee on Taxation, which issued these recommendations, the
cap would result in a budgetary savings of $1.9 (b) billion over the
next 10 years.
“We believe the recommendations are based on
flawed logic and would result in significant cost to the government and
society, not a savings,” says George W. Kessinger, President and CEO of
Goodwill Industries International. “Donated clothes and household goods
provide a vital revenue stream that allows us to offer critical social
services to millions of people worldwide.”
In a report
published in January, the Joint Committee on Taxation suggests that
millions of Americans are inflating the value of material donations to
charities. However, the report fails to offer any evidence supporting
that claim. In addition, the Committee ignores tools that the Internal
Revenue Service has in place to ensure taxpayer compliance and to help
determine a value for donated items. For example, taxpayers who claim
more than $500 for material donations must file Form 8283 (Noncash
Charitable Contributions) with the IRS, and IRS publication 526 offers
guidance for determining the fair market value of these goods.
“We
do not condone taxpayer malfeasance; however the Committee makes a
quantum leap in assuming that most taxpayers are abusing the system.
Furthermore, a $500 cap is both arbitrary and unfair, and will be a
deterrent to many people who wish to make large donations,” says
Kessinger. “This proposal aims to crack down on tax cheats, but in fact
unfairly penalizes charities.”
Goodwill Industries sells donated clothes and other household items in some 2,000 retail stores and online at www.shopgoodwill.com.
Revenues fund job training and career programs for welfare recipients,
people with disabilities, low-wage workers, and other job seekers.
“When Goodwill helps someone find a job, that person is then able to
pay taxes to the government and contribute to his community,” says
Kessinger. “Increasingly, social service organizations like Goodwill
are being asked to fill the gap left by declining government support.
By limiting the deduction for clothing donations, the proposal
encourages donors to seek more lucrative ways of cleaning out their
closets. With the sale of donated goods representing more than half of
our operating revenue, the vital social services we provide could well
be in jeopardy.” |
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