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Monday May 20, 2019

Washington News

Washington Hotline

Senators Thune and Casey Support CHARITY Act

On May 15, Senators John Thune (R-SD) and Bob Casey (D-PA) introduced the Charities Helping Americans Regularly Throughout the Year (CHARITY) Act. The bill expands giving options for IRA charitable rollovers and addresses other charitable provisions.

The CHARITY Act includes four major provisions. If it is passed by the House and Senate and signed by the President, it would generally permit donors over age 70½ to transfer up to $100,000 per year directly from an IRA to a donor advised fund. Second, the act would simplify the excise tax paid by private foundations on investment income.

Volunteers who drive their vehicles on qualified charitable trips can currently deduct $0.14 per mile. That charitable mileage amount would be increased to the same rate as is currently permitted for medical and moving expenses. The medical and moving expense rate for 2019 is $0.20 per mile.

Finally, the CHARITY Act requires nonprofits to file their annual tax returns electronically. While nonprofits are exempt and ordinarily do not pay tax, they must file an information return each year.

Editor's Note: While the CHARITY Act has not yet passed, it is encouraging to see Congressional support for philanthropy and, especially, the existing IRA rollover. Americans over age 70½ should consider making an IRA rollover gift in 2019. The IRA charitable rollover is a great planning option for eligible IRA owners who are among the 90% of Americans who do not itemize. Because the IRA rollover qualifies for part or all of an IRA owner's required minimum distribution (RMD), IRA owners can make gifts from their IRAs, reduce their tax bill from their RMDs and still take the full standard deduction. For all donors, the IRA rollover is a convenient way to make gifts in 2019.

Bipartisan Senate Support for RESA


On May 14, the Senate Finance Committee held a hearing on the Retirement Enhancement and Savings Act of 2019 (RESA). This bill was introduced by Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR).

RESA's key improvement for retirement planning is enabling multiple employers to join together to offer Sec. 401(k) retirement plans. Sen. Grassley explained this concept at a May 14 Washington conference. He noted, "The centerpiece of the bill is a concept called 'Open Multiple Employer Plans' or 'Open MEPs.' The bill would expand the existing multiple employer plan to create Open MEP plans, which will allow unrelated employers to join together to sponsor a group retirement plan for their workers."

The Open MEP concept eliminates the current requirement that limits multiple employer retirement plans. Under the current rules, only businesses that share a significant common purpose may join together to create qualified retirement plans. RESA also reduces the disqualification risk if one employer in a joint plan is not compliant.

Grassley continued, "RESA also eliminates the so called 'One Bad Apple' rule. Under this rule, if one employer within a multiple employer plan fails to meet any one of the rules covering these plans, then the entire MEP can be disqualified. This is true even if the other employers are fully compliant."

Sen. Wyden also supports the plan. He explained that over 100 million Americans do not have retirement plans. Social Security is intended to be only a partial supplement for retirement, so Congress must act to facilitate creation of qualified plans for these employees.

Wyden stated, "First, this committee worked on a bipartisan basis to put together the Retirement Enhancement and Savings Act. Our bill is all about making it easier for employers – particularly small businesses – to offer retirement plans to their employees. Giving those small businesses an opportunity to ban together and offer a common retirement plan is a simpler and more cost-effective way of helping more people save."

Editor's Note: There is bipartisan support in both the House and Senate for improving retirement plans. As a result, there is a good chance that a major retirement bill may be passed in 2019.

IRS Revenue Agents Use Data Analytics


Data analytics are omnipresent in our society. In the era of "big data," analytics are an essential tool to find and make use of information.

With over 100 million tax returns filed each year, the IRS faces a classic "big data" challenge. In recognition of this need, the IRS has been steadily moving forward with its acquisition of analytical tools. The IRS is planning to use the data analytics tools and artificial intelligence to meet its big data challenge.

At a May 16 conference at Quinnipiac University School of Law in North Haven, CT, IRS Criminal Investigation (CI) Special Agent Kristina O'Connell (Boston Office) explained the IRS's analytics efforts. IRS CI has hired several hundred new revenue agents and ten data scientists. The data scientists work closely with the revenue agents to select the most potentially productive audits. O'Connell stated, "We have never had that before and those investigative analysts can review the data in their area and farm out cases to the agents that are staffed in the area."

Data scientists review the "big data" from years of tax filings and also include public data information in their models. The public databases could include information on criminal history, motor vehicle records and real estate records.

Some conference attendees expressed concern about potential privacy violations with the new data analytics methods. O'Connell responded, "We only run the data analytics on areas of noncompliance, so I would say that your name would only be reviewed if you are noncompliant."

Editor's Note: With the proliferation of data analytics by thousands of U.S. companies, it is understandable that the IRS is also using sophisticated methods to find noncompliant taxpayers. However, these analytics and artificial intelligence tools can be very intrusive and could potentially reduce the privacy of Americans. There will continue to be a need for Congressional oversight to protect privacy rights as the IRS moves forward with implementation of more sophisticated data analytics tools.

Applicable Federal Rate of 2.8% for June -- Rev. Rul. 2019-14; 2019-23 IRB 1 (16 May 2018)


The IRS has announced the Applicable Federal Rate (AFR) for June of 2019. The AFR under Section 7520 for the month of June is 2.8%. The rates for May of 2.8% or April of 3.0% also may be used. The highest AFR is beneficial for charitable deductions of remainder interests. The lowest AFR is best for lead trusts and life estate reserved agreements. With a gift annuity, if the annuitant desires greater tax-free payments the lowest AFR is preferable. During 2019, pooled income funds in existence less than three tax years must use a 2.2% deemed rate of return.


Published May 17, 2019
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Shelby Harder, 2018
Dr. Irving Auld and Dorothy
Roher Auld Scholarship

"Many students take for granted what a university has to offer. However, I am thankful every single day for the opportunity to attend this prestigious school. At Lawrence, you have the ability to engage in Socratic debates about the world we live in at dinner, play recreational or NCAA sports, and talk one on one with brilliant professors. At Lawrence, you don't just 'learn' a subject, you are immersed in it. You dive into the liberal arts and these professors show you the beauty in it all, and how everything is tied together. I am a Biochemistry major with a soft spot for rocket science, philosophy, and evolution. Lawrence is my dream school, and it would have never been possible without the Dr. Irving Auld and Dorothy Roher Auld Scholarship. I am forever grateful for their generosity."

Juliana E. Olsen-Valdez, 2018
Carroll Family Scholarship

"Lawrence University is a great place for students looking to embrace their multi-interested approach to learning. As a Geology major, I have spent many long hours in laboratories. But, I have also had the opportunity to organize and lead students on outdoor backpacking trips, help build a stronger community for International students, participate in dialogues on campus initiatives, attend dozens of musical events, and study abroad in a field-based geology program, all while taking classes in a variety of academic spheres on campus. Lawrence, as an institution and student body, creates a collective of learners, listeners, and leaders who are continuously evolving their understanding of the world around them. I am fortunate to have the support of the Carroll Family Scholarship, so that I can say I am a part of this exceptional community too!"

Weiqi "Vicky" Liang, 2019
Marian H. Cuff Endowed Scholarship

"Lawrence is a special institution with nice people around the campus. I better myself by trying out different things and using new ways to think critically. Even though I am a Philosophy major, I have successfully taken classes in Anthropology, Biology, Economics, and Government. In addition, I still find many great extracurricular opportunities to explore, such as singing with Viking Chorale, even though I am not a music major. While having the great experience of volunteering at the elderly center last year, I became an elder advocacy coordinator at the Volunteer Community Service Center. At Lawrence, I've learned to handle difficult academic problems while looking forward to exploring possible opportunities. I am very grateful to be awarded the Marian H. Cuff Endowed Scholarship for every year I have been here, and appreciate that the scholarship has provided this wonderful Lawrence experience to me."

Anthony Cardella, 2018
Ansorge Family Scholarship

"I am so excited that I am able to attend Lawrence University. I know that I will make great progress studying piano with Dr. Michael Mizrahi. Since being at Lawrence I've already made a lot of progress and I really love it here. I am so grateful for the Ansorge Family Scholarship that made it possible for me to come to Lawrence because without it, I might not have been able to afford the cost of attending a school that is a great fit for me and a place where I will learn so much and go so far."

Milwaukee-Downer Scholarships and Professorships

Some of the many recipients of Milwaukee-Downer scholarships gather for a photo with Carolyn King Stephens M-D'62 and Marlene Crupi-Widen M-D'55 in January 2014 at the annual scholarship luncheon.

Rosamund Victoria Bille Adler Scholarship
Dr. Charles E. Albright Scholarship
Helen Daniels Bader Scholarship
James G. and Ethel M. Barber Scholarship
Catharine Beecher Endowed Fund for Downer Women
Bessie A. Bell Scholarship
Berk Scholarship
Frederick C. Best Scholarship
Beta Study Club Scholarship
Lynde Bradley Scholarship
Lucia R. Briggs-Alumnae Scholarship
Edith Lange Brooks Scholarship
Anne Barman Caldwell Scholarship
Alice Miller Chester Scholarship
City of Milwaukee Student Funds Scholarship
Milwaukee-Downer Class of 1940 Fund
Milwaukee-Downer Class of 1942 Fund
College Endowment Association Scholarship
Janet Cope Crawford Scholarship
Jessie Mabbott Daniels Scholarship
F. T. Day Scholarship
Rufus Dodge Scholarship
Julia P. Ely and Hannah R. Vedder Memorial Scholarship
General Endowed Scholarship - M-D College
Dr. Alfred W. and Mrs. Ada F. Gray Scholarship
Berenice E. Hess Scholarship Endowment
Lucille Ray Hibbard Scholarship
Belle Austin Jacobs Scholarship
Helen McDermott Jurack and Ronald J. Mason Scholarship
Marjorie S. Logan Scholarship
Nellie Maxwell Scholarship
S. Annabelle & Paul McGuire Scholarship
Memorial Scholarship Fund - Milwaukee-Downer
Milwaukee-Downer Class of 1953 Scholarship
Milwaukee-Downer Class of 1955 Scholarship
Milwaukee-Downer Class of 1956 Scholarship
Milwaukee-Downer Class of 1957 Scholarship
Milwaukee-Downer Class of 1958 and 1959 50th Reunion Scholarship
Milwaukee-Downer Club Scholarship
Milwaukee-Downer/Lawrence College Consolidation 50th Anniversary Scholarship
Francis Evelyn Kelley Morgan Memorial Scholarship
O'Neill-Anderson Family Scholarship Endowment
Elizabeth A. Olson Scholarship
Gilbert Haven Peirce, Sr. and Emma Elizabeth Manor Peirce Milwaukee-Downer Scholarship
Aleida J. Pieters Scholarship
Matilda Siefert Puelicher Scholarship
Elizabeth Ann Richardson Scholarship
William M. Ross Memorial Scholarship
Elizabeth Rossberg Scholarship
Charles Frederic Sammond Scholarship
Mildred L. Schroeder Scholarship
Sivyer Educational Fund for Women
Marion Merrill Smith Scholarship
Dr. Elizabeth A. Steffen Scholarship
W. Mead and Elizabeth McKone Stillman Scholarship
Strzelczyk Family Scholarship
Clare Scherf Sweetman Scholarship
Raymond H. and Jane K. Taylor Scholarship
Jerline E. Walfoort Memorial Scholarship
Barbara E. Wehr Fund
Harmony Weissbach Scholarship
Martha and Frances Wheelock Scholarship
James G. and Ethel M. Barber Professorship of Theatre and Drama
T. A. Chapman Professorship in Music
Alice G. Chapman Professorship in Physics
Alice G. Chapman Librarianship
Milwaukee-Downer College and College Endowment Association Professorship

Angela Small Fry Intia, 2019
Maurine Campbell Scholarship

"Thanks to the Maurine Campbell scholarship, I have been able to attend the amazing school that is Lawrence University. With the help from this scholarship, I have been able to pursue my dream career in chemistry working with the outstanding and extremely helpful faculty here. Even outside of chemistry I take the time for exploration into my interests and want to give back through my work as a resident life advisor, stock room assistant, and student supervisor at Bon Appetit. Everything I have learned here, academically or not has forever molded the person I am today."

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