CASE Urges OMB To Deny Emergency Review and Approval of Proposed Foreign Gift Information Collection Form

 

In comments submitted to the U.S. Office of Management and Budget, CASE President and CEO Sue Cunningham urges the agency to deny the U.S. Department of Education’s (Department) request for emergency review and approval of a new information collection form for disclosure of foreign gifts. CASE also urged OMB and the Department to further revise the proposed collection form.

Section 117 of the Higher Education Act  requires U.S. higher education institutions to file a disclosure report with the department if they receive gifts from or enter into a contract with a foreign source the value of which is $250,000 or more considered alone or in combination with all other gifts from or contracts with that foreign source within a calendar year. 

Last fall, the Department issued a notice seeking comments on a proposed information collection request (ICR) form for U.S. colleges and universities to report foreign gifts and contracts under Section 117. In comments submitted in November 2019, CASE President and CEO Sue Cunningham urged the Department to make seven major changes to the proposed disclosure form.

On December 17, 2019, the Department issued a notice asking the U.S. Office of Management and Budget (OMB) seeking emergency review and approval of their proposed ICR by Jan. 2, 2020. Since the Department requested emergency review, the public comment period was limited to 10 days. In response, CASE submitted additional comments urging OMB to deny the Department’s emergency request and to proceed with the regular 30-day public comment period. Additionally, CASE asked OMB and the Department to make the following changes to the revised collection form:

• Ask institutions to only report information that is required by statute and eliminate the requirement to provide donor name and address information in the disclosure report,
• Eliminate the requirement to upload true copies of gift or donation agreements, and
• Adhere to the definition of institution as outlined clearly in the statute in determining entities required to file disclosure reports.

While OMB has yet to announce a final decision on the Department’s request on the new collection form, the Department has announced that U.S. colleges and universities can use the current system to report any foreign gifts for the Jan. 31, 2020 deadline.

Reminder: Foreign Gift Reporting Deadline is Jan. 31, 2020

U.S. colleges and universities that receive charitable gifts from a foreign source, the value of which is $250,000 or more within a calendar year, must file a disclosure report with the Secretary of the U.S. Department of Education twice a year. Disclosure reports covering July 1, 2019 to Dec. 31, 2019 are due on January 31, 2020.

Institutions must submit their foreign gift reports using Federal Student Aid's Electronic Application (E-App). Advancement staff should coordinate with their president/chancellor's, financial aid and/or chief financial officer's office when submitting the form. For more information on this issue, visit our Foreign Gift Reporting resource page.

Please note: While ED is currently working to implement a new online information collection request, the Department has announced that U.S. colleges and universities can still use the existing system to report gifts for the Jan. 31, 2020 deadline. 

Year-End Spending Bill Includes Transportation Fringe Benefit, Kiddie Tax Fixes

Prior to leaving for the holiday break, Congress approved a $1.4 trillion spending package to fund the government through fiscal year 2020. Included in the package were provisions to repeal certain measures – the transportation fringe benefits tax and “kiddie” tax – included in the 2017 Tax Cuts and Jobs Act (TCJA).

Transportation Fringe Benefits Tax Repeal

Enacted as part of the TCJA, the transportation fringe benefits tax required tax-exempt, nonprofit organizations, including colleges, universities, and independent schools to pay taxes for providing employee transit and parking programs. Under the provision, nonprofit organizations faced a 21-percent tax on such benefits, creating a significant and unbudgeted tax burden.

Since passage of the TCJA, CASE and other nonprofit organizations have called for the repeal of the transportation fringe benefit tax. In Nov. 2019, CASE signed on to a coalition letter urging Congress to repeal the tax. Ultimately, the year-end spending package included repeal of the tax.

“Kiddie” Tax Fix

In addition to the transportation fringe benefit tax fix, Congress repealed a change to the “kiddie” tax on scholarships. The "kiddie" tax is a tax on the unearned income of children under 24. Prior to passage of the TCJA, a student with a scholarship was taxed at the same rate as his or her parents. The TCJA changed the tax rate regime, subjecting students to trusts and estates tax rates. As a result,  lawmakers ended up increasing primarily on low-income students receiving scholarships. In Dec. 2019, CASE joined the American Council on Education (ACE) in a letter urging Congress to pass two bills – H.R. 1994, the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) and S. 1667, the Tax Relief for Student Success Act – which contained provisions intended to fix the mistake. The SECURE Act passed as part of the year-end spending bill, restoring lower tax rates to individuals affected by the “kiddie” tax.

As Congress begins work in 2020, stay on top of  the latest news and developments by joining the CASE Advocacy Network.

Proposal Would Allow USPS to Raise Postal Rates Higher than Inflation

The U.S. Postal Regulatory Commission (PRC) is currently seeking public comments on a proposal that would allow the U.S. Postal Service (USPS) to raise rates higher than inflation. Comments are due by February 3, 2020.

Under existing law, USPS rate increases are subject to a Consumer Price Index (CPI) cap. This framework allows USPS to increase rates while providing some predictability and stability in budgeting for mailers. The PRC’s new proposal would implement new formulas allowing USPS to increase rates significantly if mail volume and use continues to fall. Rate hikes could reach 28-40 percent or higher over the next five years, significantly increasing the cost of doing business for advancement offices.

It is critical that mailers – including colleges, universities, and independent schools - weigh in with the PRC to ask them to preserve the CPI-capped rate framework in existence today. Comments are due by February 3, 2020. The Alliance for Nonprofit Mailers encourages comment letters to include the following:

• Brief description of institution and institution mission
• Describe the institution’s reliance on mail for communication and fundraising
• Relate the importance of predictable, modest price increases in helping the institution communicate and engage with its constituents.

Institutions can submit comments in two ways:

• Mail your comment letter to:

Postal Regulatory Commission

901 New York Avenue NW, Suite 200

Washington, D.C. 20268

Be sure you cite Docket RM2017-3 and to mail your letter a few days before the Feb. 3 deadline

• Apply online for a temporary account with the PRC to file your comments online.