TaxProf Weblog

David I. Walker (Boston College; Google Scholar), Donor-Suggested Funds within the Wake of the Tax Cuts and Jobs Act:

Donor-advised funds (DAFs) are conduits for charitable giving that assist quick tax deductions whereas making a reservoir of property for subsequent disposition to end-use charities. The variety of new DAF accounts has skyrocketed within the wake of the 2017 Tax Cuts and Jobs Act (TCJA). This Article presents proof suggesting that bunching charitable contributions to recreation the TCJA-enhanced normal deduction probably motivates a lot of the onslaught of latest DAF accounts established since 2016 and argues that the standard buncher is more likely to differ from different DAF account holders in ways in which matter from a coverage perspective. Thus, whereas DAF critics have typically targeted on the unproductive accumulation of property in DAF accounts and have superior reforms geared toward rushing up DAF payouts, this Article argues that within the context of bunchers, unproductive accumulation of property in DAF accounts is unlikely to be a serious drawback.

The extra vital drawback with DAF-facilitated bunching is that the price to the general public fisc is unlikely to be justified by incremental charitable giving. Thus, whereas this Article concludes that regulation focusing on DAF payouts is unobjectionable, it argues {that a} wholly completely different set of reforms focusing on the deductibility of charitable giving typically can be wanted to deal with the price of DAF-facilitated bunching beneath present legislation and beneath thoughtfully reformed legal guidelines involving common charitable deductions above a ground.

https://taxprof.typepad.com/taxprof_blog/2022/10/walker-donor-advised-funds-in-the-wake-of-the-tax-cuts-and-jobs-act.html