Cliff Stearns: “last week the gentleman from Illinois (Mr. Crane) and I introduced bill H.R. 804, a bill to repeal the 2 percent excise…”

“last week the gentleman from Illinois (Mr. Crane) and I introduced bill H.R. 804, a bill to repeal the 2 percent excise tax on private foundations. The United States is blessed with a deep spirit of philanthropy. Charitable organizations serve the interest of both the individual and the community. Private foundations in particular have made measurable differences in the lives of Americans, from access to public libraries, developing the polio vaccine, and even leading in the creation of the emergency number 911. Each and every American has experienced the benefits of the tireless efforts of these foundations. Madam Speaker, currently there are 47,000 foundations in the United States. In 1998, foundations gave away an estimated $22 billion in grants. These foundations were also forced to give the Federal Government a grant of $500 million in 1999. Under current law, not-for-profit private foundations generally must pay a 2 percent excise tax on their net investment income. This requirement was originally enacted in the Tax Reform Act of 1969 as a way to offset the cost of government audits on these organizations. So some 31 years ago, we instituted a tax on these foundations to cover the audit expense. However, when you look at the number of audits that have been performed, particularly since 1990, the IRS audits on private foundations has decreased from 1,200 to just 191.”