S. 1428: Safeguarding Charity Act

This bill, known as the Safeguarding Charity Act, aims to clarify the definition of "Federal financial assistance" as it pertains to certain tax exemptions granted to charitable organizations. The main provisions of the bill include:

Definition of Federal Financial Assistance

The bill specifies that for the purposes of various Federal laws, rules, or regulations, the term "Federal financial assistance" will not include:

• Exemptions from Federal income tax for organizations recognized under section 501(c) or section 401(a) of the Internal Revenue Code.

Significance of the Clarification

This means that charitable organizations which previously received tax exemptions will not have those benefits considered as forms of assistance provided by the Federal government. The intention behind this provision is to ensure that the tax exemptions do not affect how these organizations qualify for other types of Federal financial assistance or influence their compliance with Federal standards.

Implications for Charitable Organizations

The bill is designed to provide clarity and potentially protect charities from being penalized or losing their status or benefits due to interpretation of their tax exemptions as Federal assistance. It explicitly states that the exemptions themselves do not infer Federal support or control.

Clerical Updates

The bill also includes a clerical update to ensure that this new section regarding Federal financial assistance is accurately reflected in the legal codes, contributing to clearer legal standards and legislative clarity.

Historic Context

Furthermore, the bill indicates that this change is not meant to retroactively categorize any previous tax exemptions as Federal assistance, upholding the established understanding of these exemptions prior to the enactment of the Safeguarding Charity Act.

Conclusion on Legislative Status

The bill is currently introduced in the Senate and has been referred to the Committee on Finance for further consideration. The aim is to clarify legal definitions and support charitable organizations in maintaining their tax exempt status without it being misinterpreted as receiving government aid.

Relevant Companies

None found.