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Thursday, 13 January, 2005

Debt Freeze Criticized by Economists, NGOs

Excerpts from the BBC News article:
The Paris Club of rich creditor nations has offered to freeze the debts owed to them by countries affected by the Asian tsunami disaster...The Paris Club would be owed about $5bn (£2.7bn) in debt repayments this year...

Some development lobby groups, including UK aid agencies Oxfam and Action Aid, had urged the Paris Club to write off the debt altogether and not just defer the payments.
Oxfam said the Paris Club had failed to "take the bold steps needed on debt"...

Indonesia, one of the world's most indebted countries and the worst hit by the tsunami, has called for greater help...

Economists have warned that any debt relief must be structured carefully to avoid creating a heavier burden in the long-term. Wednesday's deal falls a long way short of this, involving only a deferment...A write-off was not thought to be under consideration even though the $5bn owing for 2005 would be, in purely financial terms, insignificant for the rich creditor nations.

2 Comments Post a comment
Anonymous Anonymous said :

Tsunami Relief -- January '05 Contributions Deductible on [USA] 2004 Tax Returns

A new [USA] law allows taxpayers who itemize to deduct on their 2004 tax returns certain contributions to charities to aid the victims of the tsunami even if the contribution was made during January 2005. For more information, see below.

Generally, contributions are deductible for the year in which they are actually made.

Contributions to domestic, tax-exempt, charitable organizations that provide assistance to individuals in foreign lands qualify as tax-deductible contributions for federal income tax purposes provided the U.S. organization has full control and discretion over the uses of such funds.


New Law Encourages Tsunami Relief Contributions

IR-2005-6, Jan. 10, 2005

WASHINGTON — The Internal Revenue Service alerted taxpayers who itemize deductions that they may claim on their 2004 tax returns charitable donations made during Jan. 2005 for relief of the victims of the Indian Ocean Tsunami.

The new law enacted on Jan. 7 allows these donations to be deducted as if they were made on Dec. 31, 2004.

“There are no extra forms to fill out or any additional burdens for taxpayers,” said IRS Commissioner Mark W. Everson. “As long as you send your check by the end of the month, the donation will be treated just like it was still 2004.”

The new law only allows for cash contributions. The contributions must be made specifically for the relief of victims in areas affected by the Dec. 26, 2004, tsunami in the Indian Ocean. The new law gives taxpayers the option of deducting the contributions on either their 2004 or 2005 returns, but not both.

The IRS advises taxpayers to be sure their contributions go to qualified charities. Taxpayers who have a specific charity in mind can make sure that it is a qualified charity by doing a search on IRS.gov. Some organizations, such as churches or governments, may be qualified even though they are not listed on IRS.gov. Donors can find out more about organizations helping the victims of the tsunami from agencies such as USAID and USA Freedom Corp.

The IRS reminds donors that contributions to foreign organizations generally are not deductible.

IRS Publication 526, Charitable Contributions, provides information on making contributions to charities. Publication 3833, Disaster Relief: Providing Assistance through Charitable Organizations, explains how the public can use charitable organizations to help victims of disasters, and how new organizations can obtain tax-exempt status. Both publications are available on IRS.gov.

When donors make contributions to assist the victims of the tsunami, they should notate their records to that effect. Donors may want to notate the memo field of checks they send that it is a contribution to help tsunami victims.

Thu Jan 13, 04:24:00 am IST  
Blogger Mother Nature said :

Sounds like the goverment acted pretty quick on this one. I just hope that everyone doesnt forget about our needs here at home as well as other abroad. It says alot that everyone is giving to the Tsunami Relief, i hope the giving continues after their needs are met!

Be Well.

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Thu Jan 13, 10:55:00 am IST