GIVE Act would boost mileage deduction for charity

A bill called the Giving Incentives to Volunteers Everywhere Act of 2008 has been introduced to increase the IRS rate for deducting for mileage for cahrity work, which has been only 14 cents per mile for more than a decade. The proposal was endorsed by more than 100 nonprofit organizations, including the Hawaii Alliance of Nonprofit Organizations, 33 other state nonprofit associations, the American Red Cross, United Way, Catholic Charities and the Independent Sector.

Rising gasoline costs have forced individuals to reduce their volunteerism because driving has become too expensive. A bipartisan proposal introduced by U.S. Senators Charles E. Schumer (D-N.Y.) and John Ensign (R-Nev.) would dramatically increase the size of the tax deduction for miles driven while performing charity work. The senators' proposal would nearly triple the current rate of 14 cents per mile -- which hasn't been increased since 1997 -- to better keep pace with the record spike in gas prices.

The charity work deduction rate can now only be adjusted by statute. Schumer and Ensign's bill would permanently set the charity rate at 70 percent of the business rate. This would have the effect of increasing the deduction from its current level of 14 cents per mile to about 40 cents per mile. The bill would also change current law so that volunteers who are already reimbursed for travel by a nonprofit at the business rate can no longer be taxed on the difference between that amount and the mileage rate for volunteers.
 
In June, the Internal Revenue Service increased the mileage rate for business use from 50 cents per mile to 58.5 cents. "Right now, charities are being punished because the law has not kept pace with the spike in gas costs. This fix will allow volunteers to keep doing their important work despite the pain at the pump. The size of the deduction for volunteer work is paltry and antiquated. It's almost inexplicable that there is such a gap between the business rate and the charitable rate," Schumer said.
 
"This is not only necessary to keep our laws current but it's also a common sense solution to a problem that discourages volunteering," said Ensign. "As gas prices continue to skyrocket, volunteers who drive seniors to the doctor or deliver hot meals to those in need are being forced to cut back because the deduction rate is so unrealistic. Let's update the deduction rate so our tax laws are fair."
 
"The problem is not solved," said Tim Delaney, executiove director of the National Council of Nonprofit Organizations. "All that has officially happened so far is that the bill has been introduced by key Senate sponsors.  We still need to get the core features enacted. ... This bill did not just happen. It required a lot of up-front leadership. Without David Ross of the Pennsylvania Association of Nonprofit Organizations having clear vision to see this key issue and then sounding the clarion call, this would not be occurring.

"David and PANO worked ... to get one of the first bills introduced, which caught the attention of others within Congress and our sector, which led to even more bills being introduced. Then David Heinen of the North Carolina Center for Nonprofits reinforced PANO’s efforts with great stories from the field," Delaney said.  Click here for more on the GIVE Act.