Edward A. Zelinsky (Cardozo), Private Foundations, DAFs, and the One Big Beautiful Bill Act, 187 Tax Notes Fed. 2135 (June 16, 2025):
In this article, Zelinsky examines the One Big Beautiful Bill Act’s proposed progressive tax rate structure for large private foundations’ net investment income, pointing out that the bill doesn’t apply the same structure to donor-advised funds.
Conclusions OBBBA section 112022 would replace section 4940’s 1.39 percent flat rate tax on private foundations’ investment incomes with a progressive structure. Under amended section 4940, NII tax rates would increase in three steps for larger private foundations.
If adopted by Congress, OBBBA section 112022 would exacerbate the code’s disparate treatment of private foundations and functionally equivalent DAFs by increasing the NII tax of larger private foundations while continuing to exempt all DAFs from such income taxation. If the Senate accepts section 112022, it should eliminate, rather than aggravate, the differential treatment of private foundations and DAFs by subjecting DAFs to the same NII tax as applies to private foundations. And, while it’s at it, the Senate would do well to apply to DAFs section 4942’s annual minimum distribution requirement.
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An American Bar Association proposal to double the hands-on coursework credits for law students is facing sharp criticism from some legal educators as being too costly, too constraining, and an overreach in controlling curriculum.
