H.R. 2896: Safeguarding Charity Act

This bill, titled the Safeguarding Charity Act, proposes to amend a specific section of the United States Code regarding tax exemptions for certain organizations. Here is a detailed breakdown of what it entails:

Purpose of the Bill

The main goal of this legislation is to clarify the classification of tax exemptions for certain charitable organizations. It specifies that these tax exemptions will not be considered as federal financial assistance.

Key Provisions

• Federal Financial Assistance Definition: The bill adds a new section to the existing law which states that exemptions from federal income tax for specific organizations are not to be treated as federal financial assistance.
• Applicable Organizations: The organizations affected by this provision are those described in specific subsections of the Internal Revenue Code, mainly sections 501 and 401. This typically includes non-profit organizations, charities, and religious organizations.
• Clarification of Intent: The bill also includes a rule of construction, which makes it clear that tax exemptions for these organizations have never been considered federal assistance prior to this legislation being enacted.

Implications

The bill seeks to ensure that tax exemptions continue to be viewed separately from federal funding or federal assistance programs. This clarification may affect how certain organizations apply for additional federal aid or grants, as it delineates that their tax-exempt status does not equate to receiving federal financial support.

Relevant Companies

None found