AASA Members Testify in Washington on IRS Proposal


James Minichello
703-774-6953 (cell)

Alexandria, Va. – Nov. 5, 2018 – David Sovine, superintendent of Frederick County (Va.) Public Schools, and Richard Fry, superintendent of the Big Spring (Pa.) School District, testified today at a public hearing in Washington, D.C., about a regulation that the Internal Revenue Service is proposing that would close a tax shelter allowing individuals to profit by donating to private school voucher programs.

The proposed IRS regulation would put an end to the practice in Virginia, Pennsylvania and 10 other states where voucher supporters are receiving federal deductions and turning profits from donations to private school programs.

“I want to thank the IRS for proposing regulations that would end a tax shelter for select taxpayers in Virginia and other states that not only provides an opportunity for a taxpayer to essentially profit from a charitable donation but can also be used as a means of diverting funding away from the public school system,” said Sovine. “Having the resources necessary to adequately fund our nation’s public schools is critical to ensure schools are equipped to provide rich educational opportunities to all children.”

“Pennsylvania’s tax credit system is overwhelmingly geared toward private school vouchers with 90 percent of the funds going to private and religious schools,” said Fry. “Not only are most of the funds being diverted away from public schools, but the Pennsylvania Educational Improvement Tax Credit also provides a triple dip tax break for corporations that substantially reduces, or in some cases erases the cost of contributions.”

The following examples illustrate how the proposed regulation would treat various donations:

  • Individuals who donate $100 and receive all of it back in state tax cuts (i.e. tax credits) will receive no (zero) federal charitable deduction. They have already been fully reimbursed for their charitable donation. They should not be allowed to turn a profit from the donation.
  • Individuals who donate $100 and receive three-quarters ($75) back in state cuts (i.e. tax credits) will only be allowed to write off the other one-quarter ($25) as a federal charitable deduction.

For specific questions about the IRS proposal, please contact Sasha Pudelski, AASA advocacy director, at spudelski@aasa.org.

About AASA
AASA, The School Superintendents Association, founded in 1865, is the professional organization for more than 13,000 educational leaders in the United States and throughout the world. AASA’s mission is to support and develop effective school system leaders who are dedicated to equitable access for all students to the highest quality public education. For more information, visit www.aasa.org.