Current rate is 14 cents compared to business rate of 58.5 cents
Two bills, HR 2020 and HR 1827, seeking to set the charitable mileage deduction at the same variable rate as business communities’ rate , are before the House Ways and Means Committee, while yet another has been introduced (HR 6283). Meanwhile, two others have been introduced in the Senate and referred to the Finance Committee (S3032 and S403).
This action comes on the heel of Monday’s IRS announcement that the Standard Business Mileage Rate will increase to 58.5 cents per mile for the second half of 2008. The Charitable Mileage Rate will remain at 14 cents. Unlike the business rate which is variable and set by the IRS periodically, the Charitable Rate is fixed at 14 cents by § 170(i) of the Internal Revenue Code.
While the business rate has steadily increased, but for a limited, Hurricane Katrina rate in 2005, the charitable rate has not increased in 10 years. With gas prices at $4.00 per gallon, it costs between 50 and 70 cents to drive a car one mile. Raising the charitable rate, to the business rate, would grant relief to organizations who rely on volunteers that drive their personal vehicles for charitable service.
What actions can you take to support these bills?
- Contact your members of Congress. Urge their support for H.R.2020. H.R.2020 would simplify the tax code, provide equity between charities and for-profits, and remove the disincentive from those Good Samaritans in our society who help the less fortunate.
- Contact your Senators: This issue will reach the Senate. We need a Champion & a strategy. S.403 and S.3032 only raise the charitable rate to a fixed 40 cents whether permanently or temporarily. But the price of gas is not expected to return to prior levels.
- Bring State & National Groups to the table. Ask other organizations to actively support H.R.2020.
Ask your members, your coworkers and your board of directors whether they volunteer or use volunteers, and whether raising the charitable reimbursement rate would help. It might be worth mentioning that volunteer board members of a 501(c)(3) can deduct mileage as volunteers if they are not otherwise reimbursed. Their answers may surprise you. And once they understand the issue, it may surprise them too. |
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