Sponsors (8)
Introduced March 25, 2025 by Jennifer Kiggans · Last progress March 25, 2025
The bill enables donors and nonprofits to deliver and deduct targeted financial aid for slain officers' families quickly while trading off modest federal revenue loss, added compliance risk for some charities, and a precedent that could complicate future tax administration.
Families of slain officers (spouses/dependents) will receive timely financial support because 501(c) organizations can make payments between Feb 22, 2025 and Feb 23, 2028 that count as related to their exempt purpose.
Donors can deduct cash gifts made exclusively for the benefit of those families without risking disallowance solely because the gifts target specific families, preserving tax benefits for contributors.
Nonprofit organizations that make payments in good faith under a reasonable, objective, and consistently applied formula will face reduced risk of being accused of prohibited inurement, lowering IRS audit and penalty exposure.
Taxpayers at large could bear indirect costs because expanded deductible gifts may reduce federal revenue, potentially affecting budgets or public services.
IRS and taxpayers may face harder tax administration because this narrow, incident-specific carve-out sets a precedent for future targeted tax exceptions, complicating enforcement and consistency.
Nonprofit organizations that do not apply a consistent, objective formula could still face inurement determinations and related penalties, creating compliance risk and uncertainty for charities.
Based on analysis of 2 sections of legislative text.
Clarifies that cash gifts for the families of officers killed in Virginia Beach after Feb 22, 2025 qualify as charitable contributions and allows tax-exempt groups to make related payments through Feb 23, 2028.
Makes cash gifts intended solely for the families of law enforcement officers killed in Virginia Beach eligible for charitable tax treatment and lets tax-exempt organizations make payments to those families without being treated as private inurement, provided certain conditions are met. Donors giving cash on or after February 22, 2025 will not have those gifts disqualified as charitable contributions just because they benefit specified families. Also allows payments from otherwise tax-exempt organizations to the spouses or dependents of the slain officers, if made in good faith using a reasonable, objective, and consistently applied formula; that safe harbor applies for payments made between February 22, 2025 and February 23, 2028.