Charitable Volunteers Mileage Reimbursement (CRS Report for Congress)
| Release Date |
May 30, 2008 |
| Report Number |
RS20296 |
| Report Type |
Report |
| Authors |
Pamela J. Jackson, Government and Finance Division |
| Source Agency |
Congressional Research Service |
Summary:
In the 110th Congress, several bills (S. 403, S. 1220, H.R. 606, and H.R. 2020) include proposals to alter the mileage deduction allowed for charitable purposes. Many proposals would allow nonprofit organizations to reimburse volunteers (without income tax consequences) for mileage driven for charitable purposes up to the business mileage rate (set at 48.5 cents per mile for 2007). The taxpayer is precluded from taking a charitable deduction if he/she is reimbursed by the nonprofit entity. Current law allows nontaxable reimbursements by charities up to the charitable mileage rate of 14 cents per mile.
The primary arguments in favor of the tax law change include tax simplification for both charities and volunteers and the incentive effect encouraging volunteers to use their automobiles in performing charitable services (especially in those cases where volunteers claim the standard deduction). It is also argued that the provision shows the government's support for and willingness to help in financing socially desirable activities. The primary arguments voiced by opponents are that the provision may be abused, that some volunteers may be overcompensated for automobile-related expenditures, and that the adoption of these proposals will reduce federal tax revenues. In all cases, the taxpayer receives a greater monetary benefit from reimbursement than from the deduction whether at the 14 or 48.5 cents per mile rate.
This report will be updated as legislation progresses through the Congress.
