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The bills described in this pamphlet have been scheduled for a public hearing on April 29, 1983, by the Senate Finance Subcommittee on Taxation and Debt Management.

There are two bills scheduled for the hearing: S. 249 ("Employee Educational Assistance Extension Act") and S. 825 (exemption from unrelated business income tax for sales of membership lists by certain organizations).

The first part of the pamphlet is a summary of the bills. This is followed by a more detailed description of the bills, including present law, explanation of provisions, and effective dates.



1. S. 249-Senators Packwood, Bentsen, Symms, Boren,
Durenberger, Moynihan, and Pryor, and others

"Employee Educational Assistance Extension Act"

Under present law, an employee's gross income does not include amounts paid or expenses incurred by the employer for educational assistance to the employee pursuant to a program that meets certain requirements (Code sec. 127). This provision is to expire for taxable years beginning after 1983.

The bill would make permanent the exclusion from gross income for amounts paid to, or on behalf of, an employee under a qualified educational assistance program. In addition, the bill would expand the exclusion to cover amounts under a qualified program for educational assistance to the employee's spouse and dependents, and would eliminate the provision under present law that makes the exclusion unavailable if the employee has a choice between educational assistance and taxable benefits. Also, meals, lodging, and transportation expenses incurred under a qualified program would become eligible for the exclusion under the bill. These modifications to the exclusion would be effective for taxable years beginning after 1983.

2. S. 825-Senator Bentsen

Exemption From Unrelated Business Income Tax for Sales of Membership Lists by Certain Organizations

Under present law, certain organizations are generally exempt from Federal income tax because of their religious, charitable, educational, or other nonprofit purposes. However, present law (secs. 511-514) imposes tax on the unrelated business taxable income of tax-exempt organizations, i.e., on gross income derived by the organization from any unrelated trade or business regularly carried on by it, less allowable deductions directly connected with the carrying on of such trade or business, both subject to certain modifications. An unrelated trade or business is any trade or business the conduct of which is not substantially related (aside from the need of such organization for income or funds or the use it makes of the profits derived) to the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption.

In the case of any tax-exempt organization which is eligible to receive tax-deductible charitable contributions, the bill would exclude from the tax on unrelated business taxable income any income from exchanging, renting, or selling names and addresses of donors to, or members of, such organization. The provisions of the bill would be effective for taxable years ending after the date of enactment.


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