Professors Shanske, Ventry Comment on Tax Proposal for San Francisco Chronicle

Professors Darien Shanske and Dennis Ventry commented for the San Francisco Chronicle on a California Senate bill that would create a state income tax credit that would be available to offset certain charitable contributions. Such a credit could mitigate the impact of the partial repeal of the state and local tax deduction that was capped as part of the Republican-sponsored tax legislation signed into law by President Trump in December.

Though critics have suggested that the Internal Revenue Service may not accept such a deduction, Shanske and Ventry have been among the legal scholars defending the idea. They are among the co-authors of “Federal Income Tax Treatment of Charitable Contributions Entitling Donor to a State Tax Credit,” a research paper that puts forth legal arguments supporting its viability.

Professor Ventry is quoted by the Chronicle on a 2011 IRS memo that states that a contribution to a state agency would be deductible even if the taxpayer received a state tax credit in return.

“The IRS gives itself a possible out,” Ventry said. “It ruled that these contributions for tax credit programs are valid … except in unusual circumstances, but it never defined unusual circumstances.”