From completing work on pending appropriations bills to a landmark overhaul of criminal sentencing laws, the week before Christmas on Capitol Hill will go down as a hectic one, to say the least.  Lawmakers are also trying to make some headway on various tax measures and extend and/or reauthorize a number of important government programs, all against a backdrop of dwindling legislative days and the likely absences of lame-duck lawmakers not coming back next year. 

Government Funding

The federal government is headed toward a partial shutdown, and as of today, Congressional leaders have no plan in place to avert it.  Without Congressional action by Friday night, roughly one-quarter of the government will shutter.  Senate Republicans have yet to formulate any real plan, and the House doesn’t return for votes until Wednesday evening.

One possible solution is a two-week continuing resolution, which punts the fight into early January.  Another solution is an omnibus spending bill which would contain funding for seven federal agencies, including an increase in border security spending. 

Taxes

Yesterday, House Ways & Means Chairman Kevin Brady released his third iteration of a plan to extend expiring tax breaks.   There could be a floor vote as early as Thursday but that is far from a guarantee given all the end-of-year drama. 

The new tax bill includes a number of provisions relevant to the nonprofit sector, such as language that would:

• repeal the Johnson Amendment that bars political activity by 501(c)(3) organizations
• repeal a 21 percent tax on parking and transportation benefits provided by nonprofit organizations
• permit a charitable deduction to college fraternities and sororities for housing improvements. 

The tax bill faces an uncertain future in the Senate, even if it can pass the House.  But, the possibility remains that Senators could simply use the measure as a “shell,” substituting in their own bipartisan tax provisions (and potentially appropriations language as well to avert the government shutdown).

Donor Disclosure

Last week the Senate narrowly voted to repeal an IRS rule that would allow nonprofit organizations to omit from the Form 990 the names of donors giving more than $5,000, although nonprofit groups would still have to retain the information.  The IRS guidance will go into effect next month. 

The Senate-passed resolution makes use of the Congressional Review Act and would still need House approval.  The House has 60 legislative days to repeal new rules under the Act, so depending on how long this lame-duck session goes, a Democratic-controlled House could potentially be able to vote on the issues early next year.