President Barack Obama released his administration's fiscal 2010 budget outline which proposes tax changes for those in the highest bracket, including a measure that will reduce the value of tax deductions for charitable donations, state and local taxes, and real estate expenses for families earning more than $250,000 (individuals exceeding $200,000). Specifically, the provision regarding the value of tax deductions for charitable donations will put a cap on the rate of the deduction from 39.6 percent to 28 percent (former President Bush's tax cuts are set to expire in 2010 and will revert back to the levels prior to 2001). This proposed tax provision among many others in the administration's 2010 budget would take effect in 2011 if enacted into law.
The response to this proposal has prompted criticism from leaders in the philanthropic and nonprofit sectors as well as members of Congress.  

• The Chronicle of Philanthropy reports that representatives from both the Independent Sector and the Council on Foundations expressed concern that the proposed limits would hinder giving. Read the full article.
• Independent Sector, a coalition of major charities and foundations, said in a statement that the plan would encourage some donors to "cap their gifts."  "This could be a problem for many struggling nonprofits vital to our communities that are already facing a very difficult fund raising environment," the organization said.
• The Center on Philanthropy at Indiana University analyzed 2006 data and determined that if the proposed tax rules were in effect at that time, giving would have dropped by nearly $4.6 billion. Read the full article.
• Representative Eric Cantor (R-VA), a member of the House Ways and Means Committee and the Congressional Philanthropy Caucus, criticized the President's plan, suggesting that, in light of the current economic crisis, the public needs charitable giving more than ever. Read the full article.
• Senate Finance Committee leaders Charles Grassley (R-IA) and Max Baucus (D-MT) echoed Representative Cantor's sentiments. Read the full article.
• Despite vocal opposition to the plan, White House officials stand by the proposal. Peter Orszag, director of the Office of Management and Budget, believes that giving will not suffer under the proposed rules because the plan won't take effect until 2011, by which time they expect the economy to be recovering. Read the full article.

• IRS Announces Workshops in Minneapolis, Boston
  The IRS has announced the dates and locations of its spring workshops for small and mid-sized exempt organizations. Workshops for small and mid-sized 501(c)(3) organizations in Minneapolis, Minn.-April 28, 29, and 30, 2009 and Boston, Mass.-June 9, 10, and 11.  The workshops are designed for administrators and volunteers who are responsible for an exempt organization's tax compliance. Each one-day session will cover the benefits and responsibilities of tax-exempt status; actions that can jeopardize an organization's exempt status; unrelated business income; employment issues; Form 990, including Form 990-N; and required disclosures, including those imposed by the Pension Protection Act of 2006. For more information, visit: www.irsworkshops.eventsdesigner.com
• Exempt Organizations Hospital Study Released
  The IRS began studying nonprofit hospitals in 2006, when the Exempt Organizations Division sent questionnaires to more than 500 tax-exempt hospitals. The final report was released last month and focuses on community benefit and compensation.