Everyday Philanthropist Act

I 116TH CONGRESS 1ST SESSION H. R. 4002 To amend the Internal Revenue Code of 1986 to provide for flexible giving accounts, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JULY 25, 2019 Mr. BUCHANAN (for himself and Mr. SUOZZI) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to provide for flexible giving accounts, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Everyday Philan- 4 thropist Act’’. 5 SEC. 2. FLEXIBLE GIVING ACCOUNTS. 6 (a) IN GENERAL.—Subsection (a) of section 132 of 7 the Internal Revenue Code of 1986 is amended by striking 8 ‘‘or’’ at the end of paragraph (7), by striking the period 9 VerDate Sep 11 2014 02:51 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4002.IH H4002 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 4002 IH at the end of paragraph (8) and inserting ‘‘, or’’, and by 1 inserting after paragraph (8) the following: 2 ‘‘(9) flexible giving account.’’. 3 (b) FLEXIBLE GIVING ACCOUNT.—Section 132 of 4 such Code is amended by redesignating subsection (o) as 5 subsection (p) and by inserting after subsection (n) the 6 following: 7 ‘‘(o) FLEXIBLE GIVING ACCOUNT.— 8 ‘‘(1) IN GENERAL.— 9 ‘‘(A) FLEXIBLE GIVING ACCOUNT.—For 10 purposes of this subsection, a flexible giving ac- 11 count is an account under an arrangement 12 which is a separate written plan of an employer 13 for the exclusive benefit of all eligible employees 14 under which— 15 ‘‘(i) an employee may elect— 16 ‘‘(I) to receive a reduction in 17 compensation and have the employer 18 deposit the amount of the reduction in 19 a flexible giving account of the elect- 20 ing employee, and 21 ‘‘(II) before the reduction under 22 subclause (I), to designate one or 23 more entities to which distributions 24 are to be made from the account, 25 VerDate Sep 11 2014 02:51 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4002.IH H4002 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 4002 IH ‘‘(ii) the employer, as soon after the 1 deposit under clause (i)(I) as practicable, 2 makes the disbursements designated under 3 clause (i), 4 ‘‘(iii) the employer provides reasonable 5 notification of the availability and terms of 6 the arrangement to all eligible employees, 7 ‘‘(iv) the employer maintains a sepa- 8 rate flexible giving account on behalf of 9 each employee for whom an election is in 10 effect clause (i), and 11 ‘‘(v) the employer agrees to furnish to 12 each participating employee, on or before 13 January 31 of each year, a written ac- 14 counting of the employee’s flexible giving 15 account showing deposits and disburse- 16 ments during the previous calendar year. 17 ‘‘(B) MAXIMUM REDUCTION.—The amount 18 of a reduction under subparagraph (A) for a 19 taxable year shall not exceed $2,700. 20 ‘‘(2) ELIGIBLE EMPLOYEE.—For purposes of 21 this subsection— 22 ‘‘(A) IN GENERAL.— 23 ‘‘(i) ELIGIBLE EMPLOYEE.—The term 24 ‘eligible employee’ means, with respect to a 25 VerDate Sep 11 2014 02:51 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4002.IH H4002 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 4002 IH flexible giving account, any employee who 1 is not a highly compensated or key em- 2 ployee and who is eligible to participate in 3 the arrangement. 4 ‘‘(ii) HIGHLY COMPENSATED EM- 5 PLOYEE.—The term ‘highly compensated 6 employee’ has the meaning given such term 7 by section 414(q). 8 ‘‘(iii) KEY EMPLOYEE.—The term 9 ‘key employee’ has the meaning given such 10 term by section 416(i). 11 ‘‘(B) CERTAIN EMPLOYEES MAY BE EX- 12 CLUDED.—For purposes of subparagraph (A), 13 an employer may elect to exclude under the ar- 14 rangement described in paragraph (1) any em- 15 ployee who— 16 ‘‘(i) has not attained the age of 21 be- 17 fore the close of a plan year of the ar- 18 rangement, 19 ‘‘(ii) has less than 1 year of service 20 with the employer as of any day during the 21 plan year, and 22 ‘‘(iii) is described in section 23 410(b)(3)(C) (relating to nonresident 24 aliens working outside the United States). 25 VerDate Sep 11 2014 02:51 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4002.IH H4002 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 4002 IH ‘‘(C) SHORTER SERVICE PERIOD; YOUNGER 1 AGE.—An arrangement may provide a shorter 2 period of service or younger age for purposes of 3 subparagraph (B). 4 ‘‘(3) TAX TREATMENT OF DISTRIBUTIONS.— 5 ‘‘(A) IN GENERAL.—Any distribution from 6 a flexible giving account shall be includible in 7 the gross income of the distributee in the man- 8 ner as provided in section 72. 9 ‘‘(B) EXCEPTION FOR CHARITABLE CON- 10 TRIBUTIONS.— 11 ‘‘(i) IN GENERAL.—Subparagraph (A) 12 shall not apply to any distribution which is 13 a charitable contribution made pursuant to 14 paragraph (1). 15 ‘‘(ii) COORDINATION WITH SECTION 16 170.—Distributions from the flexible giving 17 account of an employee— 18 ‘‘(I) shall be treated as a chari- 19 table contribution of the employee, 20 ‘‘(II) shall not be taken into ac- 21 count under section 170(a) (relating 22 to allowance of deduction), but 23 VerDate Sep 11 2014 02:51 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4002.IH H4002 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 4002 IH ‘‘(III) shall be taken into account 1 under section 170(b) (relating to per- 2 centage limitation). 3 ‘‘(C) ADDITIONAL TAX FOR DISTRIBU- 4 TIONS NOT USED FOR CHARITABLE PUR- 5 POSES.—The tax imposed by this chapter for 6 any taxable year on any taxpayer from whose 7 flexible giving account a distribution is made 8 that is includible in gross income shall be in- 9 creased by 20 percent of the amount which is 10 so includible. 11 ‘‘(D) IDENTIFYING INFORMATION.—No 12 distribution shall be excluded from the gross in- 13 come under subparagraph (B) unless the tax- 14 payer provides on the return of tax the name 15 and address of the entity to whom the distribu- 16 tion is made. In the case of a failure to provide 17 the information required by the preceding sen- 18 tence, the preceding sentence shall not apply if 19 it is shown that the taxpayer exercised due dili- 20 gence in attempting to provide the information 21 so required. 22 ‘‘(4) CHARITABLE CONTRIBUTION.—For pur- 23 poses of this section, the term ‘charitable contribu- 24 tion’ has the meaning given such term by section 25 VerDate Sep 11 2014 02:51 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4002.IH H4002 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 4002 IH 170(c), except that such term irrevocable transfers 1 of funds and not just a pledges or agreement to 2 make a transfer in the future.’’. 3 (c) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to taxable years beginning after 5 the date of the enactment of this Act. 6 Æ VerDate Sep 11 2014 02:51 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H4002.IH H4002 pamtmann on DSKBFK8HB2PROD with BILLS