Vehicle Donation Tax Law Reform: Sher & Blackwell, LLP (Current Progress)
For two years, the government relations team at the Washington, DC law firm of Sher & Blackwell, LLP has been pursuing solutions to the problems caused by recent changes in the federal tax code affecting vehicle donations. These changes were enacted in 2004 to address real and perceived tax abuses – but have had the effect of discouraging charitable contributions and curtailing social services offered by the charities. We have made significant progress completing the first three phases of our work and could now benefit from expanding the coalition of participating non-profits and affected businesses.
We are a small, aggressive team with decades of congressional experience and proven commitment to this project. The two principals are: Steven Schwadron, who served until recently as a congressional chief of staff for nearly 30 years; and Rob Freeman, who worked previously as deputy staff director of the Senate Commerce Committee. Our approach favors diligence over bluster and overhead. We have worked over the last 18 months on behalf of one client to lay the groundwork for the US Congress to revisit the issue of tax treatment of vehicle donations.
In 2004, the coalition to oppose the “reform” of vehicle donation rules was too little, too late and too scattered. The resulting legislation lost both baby and bathwater, discouraging donations and the reducing revenue on which charities depend to provide critical social services across the country. The issue has not been debated since those changes. We have been working quietly and methodically since last year to focus congressional attention on the devastating impact on the needy in local communities.
A key objective of our work is now underway: an update of a 2003 study by the General Accountability Office (GAO) on the benefits to charities and donors that result from vehicle donations. The original GAO study served as a rhetorical basis for the 2004 amendments. Our congressional allies have asked GAO to update its findings and to review the data over the succeeding tax years. The updated study, with different congressional sponsors, is expected to be completed soon and will focus instead on the human impact of the changes.
Our goal is to retain sensible elements of the 2004 legislation – for instance, to strengthen IRS tracking and enforcement capacity – while restoring the fundamental intent of the original law it amended: to encourage charitable giving through vehicle donations. Attached is a memo outlining our analysis and a summary of our action plan.