Republican Tax Heist Hits Churches, Synagogues and other Nonprofits

The Republican tax heist that passed in December 2017.  It's details confirmed that the Republican leaders’ primary goal was to enrich the country’s elite at the expense of everybody else, including future generations who will end up bearing the cost.  This fatally flawed law has many hidden gems still coming to light.

Republicans have quietly imposed a new tax on churches, synagogues and other nonprofits, a little-noticed and surprising change that could cost some groups tens of thousands of dollars.  Their recent tax-code rewrite requires churches, hospitals, colleges, orchestras and other historically tax-exempt organizations to begin paying a 21 percent tax on some types of fringe benefits they provide their employees.  

That could force thousands of groups that have long had little contact with the IRS to suddenly begin filing returns and paying taxes for the first time.  Many organizations are stunned to learn of the tax — part of a broader Republican effort to strip the code of tax breaks for employee benefits like parking and meals — and say it will be a significant financial and administrative burden.

The GOP in the House, Senate, and White House approved of this looting of the public purse by corporations and the wealthy.

It also means political peril for lawmakers, many of whom were surely unaware of the provision when they approved the tax plan. Churches’ tax-exempt status, in particular, has long been considered sacrosanct and Republicans are relying on the faithful to back them in the November elections....more than 600 churches and other groups have already signed a petition demanding it be repealed.

The underlying theme was to cut taxes as much as possible for the wealthiest and other details were ignored.

....big cuts in taxes on [large] businesses and [wealthy] individuals...But to help defray the budgetary cost of those changes, Republicans eliminated tax breaks for workers’ fringe benefits.... trimming deductions companies have long taken for entertaining clients and providing meals for employees.

But nonprofits.... don’t pay income taxes, lawmakers couldn’t take away fringe-benefit deductions.  So instead they created a 21 percent tax on the value of some of nonprofit employees’ benefits.

This part of the tax heist received no attention when the legislation sped through Congress and many groups are outraged to now learn of the requirement.

Many nonprofits say they are confused over how exactly the tax is supposed to work..... A host of groups, including the Boys & Girls Clubs of America, Goodwill Industries, the YMCA and the National Council of Nonprofits are demanding the tax at least be delayed, saying it is unfair to ask them to be paying a levy they don’t understand.

“There’s going to be huge headaches,” said Galen Carey at the National Association of Evangelicals.... “The cost of compliance, especially for churches that have small staffs or maybe volunteer accountants and bookkeepers

The Jewish Federations of North America is looking at a new $75,000 tax bill this year because of the change.

Source: https://www.politico.com/story/2018/06/26/republican-tax-law-churches-employees-670362