U.S. Department of Education Seeks Comments on Revised Foreign Gift Information Collection Request (ICR)

On February 10, 2020, the U.S. Department of Education (Department) submitted a revised ICR on foreign gift and contract disclosures to the U.S. Office of Management and Budget (OMB). Public comments on the revised ICR are due by March 11, 2020. You can view the revised form and additional information at: https://www.regulations.gov/docket?D=ED-2019-ICCD-0114. While the requirement to submit true copies of gift agreements has been eliminated from the form, the Department's ICR still goes beyond the statute (Section 117 of the Higher Education Act) by requiring colleges and universities to submit donor name and address information. Additionally, the Department would still require institutions to report foreign gifts made to third parties, such as institutionally related foundations, research entities, etc. even though these entities are legally separate from the institution.



Once again, CASE plans to submit comments on the revised ICR and will join higher education community comments assembled by the American Council on Education. 



Notice of the revised ICR coincides with the Department’s heightened scrutiny of colleges and universities over their alleged failure to report complete and accurate foreign gift and contract information. On Capitol Hill, Sens. Rob Portman (R-OH), Marco Rubio (R-FL), and Tom Cotton (R-AR) reintroduced the Foreign Influence Transparency Act, which would lower the threshold that requires U.S. colleges and universities to disclose foreign gifts or contracts from $250,000 to $50,000.



As new developments arise, visit CASE’s foreign gift reporting webpage for more background on Section 117, the foreign gift disclosure requirement, and other resources.  

President’s FY21 Budget Proposal Includes 7.8 Percent Cut to the U.S. Department of Education

President Trump released his budget blueprint on February 10, 2020, outlining $4.8 trillion in federal funding for fiscal year 2021. Under the proposal, the U.S. Department of Education (Department), among other agencies with non-defense spending, would face a 7.8 percent cut – around $5.6 billion.



Key takeaways affecting education include:

• Elimination of Public Service Loan Forgiveness – The program would be eliminated for government, tribal, and nonprofit employees working to earn forgiveness of their student loans. The proposal would also affect AmeriCorps and Peace Corps volunteers.
• Cuts to K-12 Grant Programs – 29 of the nation’s K-12 grant programs would be combined into a single funding source that local governments could spend at their discretion, potentially taking away from arts education, low-income families, rural education, and more.
• Support for New Education Programs – Increased funding around $900 million would be allocated for high school career and technical education programs.
• Creation of Education Freedom Scholarships – A $5 billion federal tax credit would be issued for individuals giving to scholarship organizations for students to attend private or other pre-college public schools.
• Borrower Limits Under PLUS Loans – The amount that can be borrowed under PLUS loan programs will be capped at $26,500 for parents and an aggregate $100,000 for graduate students, significantly reducing the amount that the government lends to individuals.

Additionally, the plan would make permanent the individual tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA), set to expire in 2025.  

While the budget request outlines key administration priorities, Congress will ultimately drive the FY21 appropriations process and is unlikely to follow the administration’s budget recommendations.

Changes to Retirement Law Impact IRA Charitable Rollover

Retirement legislation passed by Congress and signed into law by President Trump as part of the year-end spending bill makes several changes that impact the IRA charitable rollover giving incentive.

Currently, the IRA charitable rollover allows taxpayers age 70 ½ or older to direct up to $100,000 annually from their individual retirement account to a college, university, independent school, or other eligible charity without having to count the distribution as income for tax purposes.

 The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) (H.R. 1994) included three adjustments affecting the IRA charitable rollover:



1. Change in Required Minimum Distribution (RMD) Age – The RMD age moves from 70 ½ to 72. This change diminishes the incentive for donors to make IRA charitable rollover gifts between age 70 ½ and 72.

2. Contributions to IRAs Allowed After Age 70 ½ – Individuals can now make contributions to their IRAs at any age. However, if a donor contributes to their IRA after age 70 ½ and then makes an IRA charitable rollover gift, the donor must subtract any post 70 ½ contributions from the allowable non-taxable amount of the rollover.

3. 10 Year Withdrawal Rule for Non-Spouse Beneficiaries – The timeframe that non-spouse beneficiaries must withdraw inherited IRA assets is a maximum of 10 years. This change will likely incentivize beneficiaries to consider IRA charitable rollover gifts.



CASE is a member of the Legacy IRA Coalition, a charitable sector coalition that is working to enact legislation to expand the IRA charitable rollover. The Legacy IRA Act (H.R. 3832, S. 1257) would allow individuals to make up to $400,000 of tax-free distributions annually from their individual retirement accounts (IRAs) to split-interest entities (charitable gift annuities, charitable remainder trusts) beginning at age 65.  The Legacy IRA coalition’s goal is to build bipartisan support for the Legacy IRA Act and ultimately attach the bill to a second package of bipartisan retirement legislation that may be considered later this year.