Request for Recommendations on Comprehensive Tax Reform (July 17, 2017)

Topic: 
Retirement Security

The Church Alliance submitted comments to the Senate Finance Committee (SFC) in response to a request for recommendations on comprehensive tax reform. The comment letter explains to the SFC how several longstanding provisions of the tax code have been carefully tailored to the needs of churches and church ministry organizations, and retaining and strengthening these provisions should be a part of tax reform. Specifically, the comment letter requests (1) clarification that all church-affiliated organizations, including “non-QCCOs,” may participate in a church § 403(b)(9) retirement plan, (2) preservation of the parsonage allowance, (3) retaining retirement plan provisions important to church organizations that could be lost if retirement plan types under the tax code (401(a), 403(b), 401(k), 457(b), etc.) are consolidated or harmonized, (4) parity between church retirement plans and Individual Retirement Accounts (IRAs) with respect to required minimum distributions and qualified charitable distributions (as retirement plans are subject to less favorable rules than IRAs), (5) avoiding legislation that would impose taxes on dividends or other earnings of investment portfolios of tax-exempt organizations, and (6) avoiding legislation that would reduce current limits on pre-tax elective deferral contributions to certain retirement plans and require any contributions in excess of the reduced limits to be treated as post-tax or “Roth” contributions.