New Jersey AG asks IRS not to enact new law that could undermine New Jersey tax law

By Mark Iandolo | Jun 1, 2018

TRENTON, N.J. (Legal Newsline) – New Jersey Attorney General Gurbir S. Grewal announced May 24 that he has asked the U.S. Internal Revenue Service (IRS) to not enact a new law that he claims would undermine a recent New Jersey law.

“The IRS should not play politics. Instead, it must confirm its long-standing interpretation of federal law,” Grewal wrote in a letter to the IRS. “Should the IRS and Treasury Department continue down this path, New Jersey will have no choice but to challenge the new rule in court.”

New Jersey enacted a law that lets residents receive property tax credits after making charitable contributions to local governments. Now a Trump Administration tax overhaul could affect that rule.

“The statute is explicit that such contributions include gifts given to state governments and their political subdivisions,” Grewal wrote in the letter. “The only remaining issue is whether such gifts are deductible if the contributor gets a tax credit in return." 

Grewal asked acting IRS Commissioner David J. Kautter not to enact the rule.

“I ask you to think twice before going down that misguided road,” Grewal wrote. “The IRS’s longstanding approach, supported by precedent and policy, supports what New Jersey has done.”

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