As people sort through the tax bill that passed Congress over the weekend, they will likely discover a number of provisions that have not been reported on in major media. For charities, the tax bill did very little to help charitable giving – and in some ways actually hurt. Here are few things we are finding as we sift through the bill, which was only made available this afternoon. If there are any errors in this, we will post corrections to our website during the coming week. What Did Not Get in the Tax BillNon-itemizer Deduction. Arguably the most popular tax provision within the nonprofit community that Congress is considering this year. This provision would allow those who do not itemize on annual tax returns to receive a deduction for charitable contributions. There are different versions of this provision: some allow the deduction to occur with any contribution amount; others put a floor - one proposal is $500 - before the deduction kicks in. In the House, the non-itemizer is now linked with charitable choice and other faith- based initiatives promoted by the President (see H.R. 7, Community Solutions Act). At this time, not much activity is occurring with these bills. The non-itemizer has an uphill fight to get enacted. First, it is considered very costly, especially after the current tax has gobbled up an enormous part of the surplus, leaving very little for other priorities such as prescription drugs. Even versions that have a floor may be too costly. Second, it is criticized by some tax experts as subject to fraud. People who utilize the non-itemizer deduction can get away with making up contributions they gave, some experts argue. Third, if the provisions continue to be linked to charitable choice, which is considered highly controversial, it will be very difficult to pass. Finally, it is uncertain how many, if any, tax bills will pass Congress now that the Democrats control the Senate. Majority Leader Tom Daschle (D-SD) said over the weekend that any future tax bills will require an offset to be considered. Thus, the non-itemizer would have to come at the expense of something else. IRA Rollover. The Senate version of the tax bill allowed tax-free withdrawals from Individual Retirement Accounts (IRAs) for charitable purposes – another idea popular in the nonprofit community. However, it would not have phased in until 2010 – and since the tax bill sunsets at the end of 2010, it would hardly be a victory. Moreover, the provision that charities have advocated call for the IRA rollover to kick in at age 59 1/2, but in the tax bill it doesn't kick in until age 70 1/2 In any case, the final tax bill dropped the IRA rollover provision entirely. There is a broader IRA rollover provision in the House charitable choice bill, H.R. 7. Like the non-itemizer deduction, it will face a hurdle because of the uncertainty of future tax bills and its linkage with charitable choice. Artistic Contributions. The Senate version had a provision that would encourage charitable contributions of literary, musical, or artistic compositions by assessing the value of the contribution at fair market value, rather than the cost of materials. The final bill dropped this provision. Lobbying Simplification. The Joint Committee on Taxation (JCT) recommended changes to simplify the tax code that would help charities that want to engage in public policy debates. The JCT proposed eliminating the distinction between grassroots (or indirect) and direct lobbying. Instead, lobbying of any type would be counted under one expenditure ceiling, which would be the current ceiling for direct lobbying. Some charities have proposed adjusting the ceiling for inflation since it has not changed since 1976. Some hoped that the revision would have been in the tax bill sent to the President. But it was not in the bill. Section 527 Campaign Finance Disclosure. The Senate version had a provision that would exempt PACs (Section 527 groups) that report to state and local election agencies and do not work on federal elections. These PACs would no longer have been required to file financial disclosure reports with the IRS, but would have continued to file a notice of their existence. The provision was dropped in the final bill. Tax Exempt Bonds for Reducing Arsenic in Drinking Water. The Senate version created tax-exempt bond authority for treatment facilities reducing arsenic levels in drinking water. The final bill dropped this provision. What Did Make It in the Tax BillEstate Tax Changes. Nothing else in the tax bill has as large an impact on charities as changes made to the estate tax. The bill makes two changes that could affect charitable contributions: increasing the amount of money that is excluded from taxation, and lowering the tax rate. It is difficult to estimate the impact these changes will have on charitable bequests. It is known that three-quarters of charitable bequests come from estates valued at $2.5 million or above. Between now and 2008, the amount exempted from taxes increases from $1 million to $2 million. Thus, the change is likely to affect the estates that give in total slightly less than one-quarter of charitable giving, roughly $3.4 billion. In 2009, the exemption amount increases to $3 million, increasing the stakes for charities. Moreover, the impact reducing tax rates has on charitable giving is unknown, and the interaction of reducing tax rates and increasing amounts exempted from taxation is even more uncertain. One change in the estate tax – the phasing out by 2005 of the state tax credit – is likely to have an indirect impact on charities. Most states have a "pick up" tax, meaning that a portion of the money collected by the federal government under the estate tax goes to them. This provides sizable revenues in many states. Thus, the repeal of the state tax credit will mean either that states will need to impose a new tax or face revenue shortfalls. If there are revenue shortfalls, it could mean cuts in services that charities help deliver. Allow More Itemized Deductions. The tax bill eliminates the overall limitation on itemized deductions for all taxpayers. It is reduced by one-third in 2006 and 2007, and by two-thirds in 2008 and 2009. It is eliminated in 2010. Presumably this would have some effect on charitable giving.