11/30/2022

California has a plan to skirt the GOP tax law. IRS veterans say it is likely doomed.

California’s plan to shield residents from a tax hike under President Trump’s tax plan is likely to fail, said seven former high-ranking Internal Revenue Service and Treasury Department officials.

The proposal, passed by the state Senate last month, is seen as a test case for blue states trying to help their taxpayers avoid a giant increase under the GOP plan’s $10,000 cap on deductions of state and local property taxes.

The California measure would allow residents to make “charitable” contributions to a new state-run nonprofit group in exchange for a credit that would offset their state tax burden. Classifying the payments as charitable contributions rather than local taxes would help Californians avoid hitting the cap.

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