Charitable Standard Mileage Rate: Considerations for Congress

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In response to a sharp rise in gasoline prices, on June 23, 2008, the Internal Revenue Service
(IRS) announced an increase in the optional standard mileage rates for the second half of 2008,
for the two rates it has the authority to set. The IRS raised the standard mileage rate for business
use of a personal passenger automobile from 50.5 cents to 58.5 cents per mile, and the standard
rate for medical or moving purposes from 19 cents to 27 cents per mile, effective July 1, 2008,
through December 31, 2008. In contrast, the standard mileage rate for charitable activities is set
by statute and has remained at 14 cents per mile since 1998.
The charitable standard mileage rate is used to determine the size of the itemized deduction that a
taxpayer may claim for unreimbursed automobile expenses incurred in conjunction with
charitable volunteer work. The optional standard mileage rate is a simplified alternative to
keeping track of actual deductible automobile expenses. The charitable standard rate also
determines the amount of mileage reimbursement that a volunteer may receive tax-free from a
charity.
In evaluating whether the charitable standard mileage rate should now be higher than 14 cents a
mile, there are three basic questions to consider. First, should the charitable standard mileage rate
continue to be set by statute, or should authority to set the charitable rate be returned to the IRS?
Second, where should the charitable rate be set relative to the other two standard mileage rates,
and why? Should the charitable rate be equal to, or higher than, the medical/moving rate? If
higher, specifically what additional costs should be included? Should the charitable rate be as
high as the business rate? If so, on what reasoning is this based? Third, should reimbursed
mileage be treated more favorably than unreimbursed driving expenses?
Sixteen bills introduced in the 110^th Congress would raise the charitable mileage rate, to different
levels. A second group of bills would permit volunteers to exclude from taxable income mileage
reimbursements up to the business standard mileage rate. A third group of bills would increase the
tax benefits only for charitable driving related to federally declared disasters, with tax-free
reimbursement up to the business rate and deductions at 70% of the business rate. The Heartland
Disaster Tax Relief Act of 2008, enacted on October 3, 2008, in conjunction with the Emergency
Economic Stabilization Act of 2008 (the financial rescue bill) as part of P.L. 110-343 (H.R. 1424),
grants these enhanced tax benefits to the federally declared Midwestern disaster areas, from the
date of the disaster through December 31, 2008.
Calculations presented in the report show that, under current tax law, volunteers who are
reimbursed for their driving expenses receive more favorable treatment than those who deduct
their unreimbursed mileage, even though the provisions are valued at the same number of cents
per mile. Setting the tax-free reimbursement amount higher than the deductible amount would
widen the existing disparity in after-tax benefits. The proposals do not explain or justify
increasing the preferential tax treatment of charitable mileage reimbursement relative to the ^th
charitable mileage deduction. This report will be updated for the 111 Congress, as events
warrant.

Overvi ew ....................................................................................................................... .................. 1
Roles of the Optional Standard Mileage Rate.................................................................................5
Itemized Deduction for Unreimbursed Charitable Mileage Expenses......................................5
Tax-Free Mileage Reimbursements by Charitable Organizations.............................................6
Why the Charitable and Medical/Moving Standard Mileage Rates Are Lower than the
Business Rate...............................................................................................................................7
How Much is the Tax Subsidy Worth?..........................................................................................10
Mileage Deduction..................................................................................................................10
Mileage Reimbursement.........................................................................................................13
Legislative History........................................................................................................................16
Deficit Reduction Act of 1984 (P.L. 98-369)..........................................................................16
Taxpayer Relief Act of 1997 (P.L. 105-34).............................................................................17
Katrina Emergency Tax Relief Act of 2005 (P.L. 109-73)......................................................17
Heartland Disaster Tax Relief Act of 2008 (Title VII of P.L. 110-343)..................................18
Overview of Bills in the 110^th Congress........................................................................................18
Bills to Raise the Charitable Standard Mileage Rate..............................................................19
Bills to Exclude from Taxable Income Reimbursement for Charitable Mileage up to
the Business Standard Mileage Rate....................................................................................19
Disaster-Related Bills..............................................................................................................20
Table 1. Optional Standard Mileage Rates for Charitable, Medical/Moving, and Business
Purposes, 2003-2008....................................................................................................................1
Table 2. Variable and Fixed Automobile Costs Incorporated in the IRS’s Medical/Moving
and Business Standard Mileage Rates..........................................................................................8
Table 3. Automobile Costs Deductible and Not Deductible as a Charitable Expense,
According to IRS Instructions to Taxpayers.................................................................................9
Table 4. Tax Returns with Itemized Charitable Deduction, by Adjusted Gross Income
(AGI) Class, Tax Year 2006........................................................................................................11
Table 5. Tax-Free Reimbursement vs. Tax Saving from Deduction at 14 Cents Per Mile
under Current Law.....................................................................................................................12
Table 6. Income Tax Saving Per 100 Miles, by Marginal Tax Rate, for Alternative
Proposed Charitable Standard Mileage Rates............................................................................13
Table 7. Reimbursement of 58.5 Cents After Tax vs. Tax Saving from Deduction at 14
Cents and at 58.5 Cents, by Marginal Tax Rate.........................................................................15
Table 8. Disaster-Related Proposals: Tax-Free Reimbursement at 58.5 Cents vs.
Deduction at 41 Cents, by Marginal Tax Rate............................................................................16
Table A-1. Optional Standard Mileage Rates for Business, Medical/Moving, and
Charitable Purposes, 1980 - 2008...............................................................................................22

Appendix A. Standard Mileage Rates, 1980 - 2008......................................................................22
Appendix B. Individual Bills in the 110^th Congress......................................................................24
Author Contact Information..........................................................................................................32

In response to a sharp rise in gasoline prices, on June 23, 2008, the Internal Revenue Service
(IRS) announced an increase in the optional standard mileage rates for the second half of 2008,
for the two rates it has the authority to set. The IRS raised the standard mileage rate for business
use of a personal passenger automobile from 50.5 cents to 58.5 cents per mile, and the standard
rate for medical or moving purposes from 19 cents to 27 cents per mile, effective July 1, 2008, ¹
through December 31, 2008. In contrast, the standard mileage rate for charitable activities is set
by statute, in Internal Revenue Code Section 170(i). The charitable mileage rate has remained at
14 cents per mile since 1998. Table 1 shows the three standard mileage rates in effect for 2003
through 2008.
Table 1. Optional Standard Mileage Rates for Charitable, Medical/Moving, and
Business Purposes, 2003-2008
^{(cents per mile)}
^Purpose²⁰⁰^{3 200}⁴²⁰⁰⁵²⁰⁰^{6 200}⁷^{Jan. –June}²⁰⁰⁸^July-Dec.²⁰⁰⁸
^Charitable^{14 14}¹⁴^{14 14}¹⁴¹⁴
^{Medical or moving}¹²¹⁴¹⁵¹⁸²⁰¹⁹²⁷
^{Business 36}^37.5^40.5/4^8.5⁰^{44.5 48.5}^50.5^58.5
^Sources:^{The c}^{haritable mileage rate of 1}⁴^cent^{s pe}^{r mile is set in}^{Sec. 170(i) of the I}^nter^{nal Reven}^{ue Code. For}
^busines^{s and medical/moving rate}^{s: U.S. Internal Revenue Service.}^{Rates for 20}^{03: IRS Rev. Proc. 20}^02-6^{1, 20}^02-²
^{CB 616. Rates for}²⁰⁰⁴^and²⁰⁰⁵^:^{IRS News Release IR-200}^4-1^39,^{Nov. 17, 2}⁰⁰^{4. Rates for 2}⁰⁰^{6: IRS Rev. Proc.}
²⁰⁰^5-7^{8. Rates for 2}⁰⁰^{7: IRS Ne}^{ws Release IR-200}^6-1^{68, Nov. 1,}²⁰⁰^{6. Rates for Ja}^nua^{ry 1}^{- Ju}^{ne 3}^{0, 20}^{08: IRS}
^{News Release IR-20}^07-¹⁹^{2, Nov. 27, 2}⁰⁰^{7. Rates for J}^{uly 1 - Dece}^mber^{31, 2}⁰⁰^{8: IRS News Releas}^{e IR-200}^8-8^2,
^June^23,²⁰^{08. Available on the}^I^{RS website http://www.irs.gov.}
^a.^{The bu}^{siness sta}^{ndard mileage ra}^{te was 4}^{0.5 ce}^{nts for Ja}^nua^{ry t}^h^r^{ough Aug}^{ust, 2}⁰⁰^{5, and 4}^{8.5 ce}^nt^{s for}
^September^throug^{h Decem}^{ber, 2}^005.
Volunteers who claim a tax deduction for their charitable driving expenses have reportedly been
complaining to their representatives in Congress that the charitable mileage rate did not increase
along with the business and medical/moving rates. Several bills that would raise the charitable
standard mileage rate and/or the tax-free charitable mileage reimbursement rate were introduced ^th
in the 110 Congress.
To encourage support for the charitable sector of the economy, the tax code permits taxpayers to
claim contributions to qualified charitable organizations as an itemized deduction on their income
tax return. The IRS permits volunteers to deduct certain unreimbursed “out-of-pocket” expenses
they incur in providing donated services. That includes the gasoline and oil expenses related to
the use of a personal passenger automobile in performing charitable work. As an alternative to
keeping track of actual gasoline and oil expenses, a volunteer can keep a record of the number of
charitable miles driven, and then multiply the total charitable miles for the year by the optional
charitable standard mileage rate.

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Under certain circumstances, the tax code permits taxpayers who are reimbursed for expenses that
would be deductible to not include reimbursements up to a certain dollar amount in their taxable
income. (This is intended to simplify the entries and calculations required on the tax return.) In
that vein, volunteers who receive reimbursement from a charitable organization for their driving
expenses need not report reimbursements up to the charitable standard mileage rate as taxable
income.
Prior to 1985, the charitable standard mileage rate was set by the IRS, usually at the same level as
the medical and moving standard mileage rate. The rate reflected only the “variable costs” of
driving an automobile. These are the costs that are expected to vary in proportion to the number
of miles driven. Variable costs include expenditures for gasoline, oil, tires, and maintenance. This
rate was substantially lower than the business standard mileage rate, which, along with variable
costs, also incorporates “fixed costs” associated with owning and maintaining an automobile,
including depreciation, license plate and car registration fees, and insurance.
The Deficit Reduction Act of 1984 (P.L. 98-369) added Section 170(i) to the Internal Revenue
Code (IRC), which set the charitable mileage rate at 12 cents per mile. At the time, the
medical/moving rate was 9 cents per mile and the business rate was 21 cents per mile for the first
15,000 miles, and 11 cents per mile for additional miles. Thirteen years later, the Taxpayer Relief
Act of 1997 (P.L. 105-34) raised the charitable rate to 14 cents per mile effective in 1998. For
comparison, in 1997 the medical/moving rate was 10 cents per mile and the business rate was

31.5 cents per mile. The charitable standard mileage rate remains at 14 cents today, 10 years later.

(Table A-1, at the end of this report, presents the three standard mileage rates from 1980 through

2008.)

The Katrina Emergency Tax Relief Act of 2005 (KETRA, P.L. 109-73) temporarily raised the
charitable rate to 70% of the standard business mileage rate for driving specifically related to
Hurricane Katrina relief efforts. Alternatively, Katrina volunteers could exclude from their taxable
income mileage reimbursements up to the standard business mileage rate. The Heartland Disaster ²
Relief Act of 2008, enacted October 3, 2008, made these same enhanced tax benefits available
through December 31, 2008, for charitable driving related to the Midwestern disasters of the
spring of 2008.
Numerous items in the tax code are “indexed” for inflation. That is, their numeric value is ³
automatically adjusted over time, based on a general inflation index. But an automatic
adjustment based on a general inflation index would not be appropriate in the case of the standard
mileage rates, which are linked to the cost of gasoline per mile driven. The price of gasoline has a
history of moving independently from the general inflation rate. Also, changes in the fuel
efficiency of automobile engines over time affect the average cost of gasoline per mile.
Instead, the IRS is responsible for monitoring and adjusting the standard mileage rates for
business purposes and for medical or moving purposes. The IRS determines the rates based on an
annual study conducted by a private company, currently Runsheimer International, of the fixed ⁴
and variable costs of operating a car. The IRS typically announces in November the rates to take

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effect on January 1 of the coming year. On occasion, the rates are adjusted mid-year, in response
to large changes in the price of gasoline, as they were in July 2008. In 2005, the business mileage
rate was 40.5 cents through August. In response to higher gasoline prices following Hurricane
Katrina on August 29 and Hurricane Rita on September 24, the business rate was set at 48.5 cents
for the last four months of 2005. It was then lowered halfway back, to 44.5 cents, for all of 2006.
(Refer back to Table 1.)
The legislative history of IRC Sec. 170(i)⁵ suggests that Congress felt that the charitable standard
mileage rate should be slightly higher than the medical/moving rate, but not as high as the
business rate. However, no formal criteria or guidelines were provided to help maintain the
difference in rates in the future—in either the law setting the charitable rate, official explanations
of the legislation, or regulations related to the law. Based on previous practices, it is likely that if
authority to set the charitable rate were returned to the IRS absent such instructions from
Congress, the IRS would again set the charitable rate equal to the medical/moving rate. Hence, if
Congress wants the charitable rate to be set higher than the medical/moving rate, it may need to
state the basis for the difference in rates.
In evaluating the prospect of changing the charitable mileage rate from the existing 14 cents per
mile, there are three basic sets of questions to consider:
• Should the charitable standard mileage rate continue to be set by statute? Or,
should the authority to set the charitable rate be returned to the IRS?
• At what level should the charitable rate be set relative to the other two standard
mileage rates? Should the charitable rate be equal to, or higher than, the
medical/moving rate? If higher, specifically what additional costs should be
included? Should the charitable rate be as high as the business rate? If so, what
reasoning would justify that?
• Should volunteers who receive mileage reimbursements from their charitable
organizations receive more generous tax treatment than volunteers who deduct
their unreimbursed automobile expenses? If not, what changes can be made to
the tax treatment of mileage reimbursements and/or mileage deductions?
The IRS could help Congress address these questions by sharing more information about the
individual cost items that it includes as deductible automobile costs, and the monetary value it
assigns to each of these cost components, in setting the medical/moving and the business standard
mileage rates.
Sixteen bills introduced in the 110^th Congress would have raised the charitable standard mileage
rate. Each took a different approach. S. 1220 (Schumer) proposed a permanent increase in the
charitable mileage rate to 30 cents per mile. Companion bills S. 3032 (Schumer) and H.R. 6283
(John Lewis) would permanently increase the charitable rate to 40 cents per mile. H.R. 6368
(Brady) would make the charitable rate equal to the medical/moving rate determined by the IRS.
Companion bills S. 3429 (Schumer) and H.R. 6835 (Hall) would set the charitable rate at 70% of
the business standard mileage rate. H.R. 2020 (Platts) and S. 3421 (Casey) would raise the

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charitable rate to the standard mileage rate for business purposes that is revised periodically by
the IRS. H.R. 606 (Hayes) would raise the charitable rate to the business rate only for emergency
medical responders and firefighters serving qualified volunteer fire departments. H.R. 6675
(Latta) would permanently set at 58.5 cents per mile the standard mileage rate that applies to the
delivery of meals to homebound individuals who are elderly, disabled, frail, or at risk. H.R. 2415
(Paul) would temporarily raise the charitable rate to the business rate when the price of gasoline is
above $3.00 per gallon.
S. 3246 (Cardin) would give the Secretary of the Treasury the authority to set the charitable rate.
H.R. 6854 (John Lewis) and S. 3532 (Cardin) would give the Secretary of the Treasury the
authority to set the charitable rate, with the condition that it not be set lower than the medical
standard mileage rate. H.R. 7006 (Rangel), passed by the House on September 24, 2008, would
give the Secretary of the Treasury the authority to set the charitable mileage rate through
December 31, 2011, also subject to the proviso that it not be set lower than the medical standard
mileage rate at the time.
A second group of bills would allow volunteers to exclude from their taxable income mileage
reimbursement from charitable entities, up to the standard business mileage rate. H.R. 606
(Hayes) would restrict this tax benefit to volunteer emergency medical responders and
firefighters. H.R. 1827 (Petri), H.R. 6835 (Hall), S. 403 (Feingold), the Senate-approved version
of H.R. 2419, S. 3429 (Schumer), and S. 3532 (Cardin) would make this tax benefit available to
all charitable volunteers.
A third group of bills would reinstate the special rules that were enacted for Hurricane Katrina
volunteers. These bills would increase the tax benefits only for charitable driving related to
federally declared disasters, for a limited time following the disaster. P.L. 110-343, enacted on
October 3, 2008, provides these enhanced tax benefits to the presidentially declared Midwestern
disaster areas of 2008, through December 31, 2008. The same provisions were included in H.R.

6049, as amended and passed by the Senate on September 23, 2008, S.Amdt. 5035 (Grassley),

and companion bills H.R. 6587 (Loebsack)/S. 3322 (Grassley). H.R. 6958 (Brady) would provide
these tax benefits to the Hurricane Ike recovery area. S. 3335 (Baucus) would make these tax
benefits available for all federally declared disasters in 2008 and 2009.
This report calculates the tax saving per mile from a charitable mileage deduction, at each of the
six marginal tax rates under the individual income tax, at the current rate of 14 cents per mile and
at alternative charitable mileage rates proposed in the bills introduced. It also compares the value
of mileage reimbursements after tax under different scenarios to the tax savings from mileage
deductions.
The calculations reveal large differences in the tax saved per mile deducted, depending upon the
value of the standard mileage rate. This highlights the importance of having Congress or the
Internal Revenue Service justify the differences among the standard mileage rates for different
purposes.
The tax saving from a given deduction amount per mile is higher, the higher the taxpayer’s
marginal tax rate. This raises the question of whether the tax subsidy should be given in the form
of a tax credit per mile, which would have equal value to all taxpayers, rather than a deduction,
whose value increases with the taxpayer’s marginal tax rate.

Oppositely, the after-tax value of a reimbursement in excess of the charitable standard mileage
rate falls, the higher the taxpayer’s marginal tax rate. This also reflects the system of graduated
income tax rates, but in reverse. Nevertheless, at every marginal tax rate, taxpayers receive a
greater monetary benefit from reimbursement, even if it is taxed, than from a deduction of an
equal amount per mile.
These calculations show that, under current tax law, volunteers who are reimbursed for their
driving expenses receive more favorable treatment than those who deduct their unreimbursed ^th
mileage. Nonetheless, a group of bills introduced in the 110 Congress (the second group) would
raise the level of tax-free reimbursement for volunteers up to the business standard mileage rate,
without increasing the standard mileage rate for deducting the unreimbursed car expenses of
volunteers.
The group of bills that would increase the tax benefits only for charitable driving linked to a
federally declared disaster (the third group) would permit tax-free reimbursement up to the full
business standard mileage rate but only permit mileage deductions at 70% of the business mileage
rate. The calculations show that tax-free reimbursement is worth more than a deduction, even if
they are valued at the same dollar amount per mile. Setting the tax-free reimbursement amount
higher than the deductible amount would widen the existing disparity in after-tax benefits.
The proposals do not explain or justify increasing the preferential tax treatment of charitable
mileage reimbursement relative to the charitable mileage deduction.

The optional standard mileage rates are used to calculate the tax-deductible costs of operating a ⁶
personal passenger automobile for business, charitable, medical, or moving purposes. The
business standard mileage rate is commonly used by both private businesses and government
organizations as the rate at which they reimburse employees who use their personal automobile
for business purposes of the employer. The business standard mileage rate also serves as the
upper limit for tax-free reimbursement of automobile expenses by an employer.
The optional charitable standard mileage rate is used to calculate the size of the itemized
charitable deduction that a taxpayer may claim for certain unreimbursed out-of-pocket expenses
of using his or her own automobile to conduct volunteer work. The charitable standard rate also
determines the amount of mileage reimbursement that a volunteer may receive tax-free from a
charitable organization.
Taxpayers can claim contributions to qualified charitable organizations⁷ as an itemized deduction ⁸
on their income tax return. Charitable volunteers are permitted to deduct certain unreimbursed

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“out-of-pocket” expenses that they incur in providing donated services. That includes certain
“variable costs” related to the use of a personal passenger automobile in performing charitable
work, specifically spending for gasoline and oil.
A taxpayer has the choice of keeping track of actual deductible automobile expenses or using the
“optional standard mileage rate.” Regardless of the computation method used, the taxpayer may
not deduct any amount for general repair or maintenance expenses, depreciation, insurance,
registration fees, tires, or insurance. Under either method, the taxpayer may, in addition, deduct ⁹
payments for parking or tolls related to the charitable work.
Under either computation method, the taxpayer must keep reliable written records of expenses
incurred. Where a taxpayer uses the charitable standard mileage rate to determine a deduction, the
IRS has stated that the taxpayer generally must maintain records of miles driven, time, place (or
use), and purpose of the mileage. Under the alternate method, the taxpayer generally must ¹⁰
maintain a reliable written record of actual expenses incurred. There is no ready way for the IRS
to verify the deductions for charitable mileage claimed by individuals.
When a volunteer is reimbursed by a charity for mileage expenses, the volunteer must recognize ¹¹
taxable income to the extent that the reimbursement exceeds his or her deductible travel costs.

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^Y^our^r^e^c^o^r^d^s^m^u^s^t^s^how^the^na^m^e^of^the^or^g^a^niz^a^tion^y^{ou w}^e^r^e^se^r^v^ing^a^nd
^t^h^{e d}^a^t^e^each^tⁱ^m^e^y^o^u^u^s^ed^y^o^u^r^{car f}^o^{r a ch}^ari^t^a^b^l^{e p}^u^r^p^o^s^e.^If^y^o^u^u^s^{e t}^h^e
^st^an^d^a^rd^mⁱ^l^{eage rat}^e^o^f¹⁴^cen^t^s^{a m}ⁱ^l^e^,^y^o^u^r^reco^rd^{s m}^u^st^sh^o^w^t^h^{e m}ⁱ^l^e^s
^y^{ou dr}^ov^e^y^our^c^a^r^f^o^r^the^c^h^a^r^ita^ble^p^u^r^p^os^e^.^I^f^y^{ou de}^d^u^c^t^y^our^a^c^t^ua^l
^exp^eⁿ^s^es,^y^o^u^r^reco^rd^{s m}^u^st^sh^ow^t^h^{e co}^st^{s o}^f^o^p^e^ratⁱⁿ^{g t}^h^{e car t}^h^at^are
^dire^c^tly^re^la^te^{d to a}^c^h^a^r^ita^ble^p^u^r^pose^.
^U^.^{S. D}^e^pa^r^t^m^e^{nt of}^the^T^r^e^a^s^ur^y^,^Iⁿ^te^rⁿ^a^l^R^e^v^e^nue^Se^r^v^ic^e^,^Yo^ur^F^e^de^r^a^{l I}ⁿ^c^o^m^e^T^a^x^{, F}^o^r^I^ndivⁱ^dua^ls^{, For}^us^eⁱⁿ
^pr^e^p^a^r^ing²⁰⁰⁷^R^e^turⁿ^s^,^Pu^blic^a^tⁱ^on^17,^p.¹^{57 f}^o^r^c^a^r^e^x^pe^ns^e^ite^m^s^a^nd^p.¹⁶²^f^o^r^r^e^c^o^r^d^k^e^e^p^ing^r^e^quir^e^m^e^nts^.^T^h^e
^s^a^m^e^inf^o^r^m^a^{tion c}^aⁿ^be^f^oun^{d i}ⁿ^{: I}^R^S,^C^har^it^able^C^oⁿ^t^rⁱ^bu^tio^ns^{, For}^us^e^{in pr}^e^p^a^r^ing²⁰⁰⁷^R^e^t^u^rⁿ^s^,^P^u^blic^a^tioⁿ⁵²⁶^,
^{p. 5}^f^o^{r c}^a^r^e^x^pe^nse^ite^m^s^a^{nd p.}^{19 f}^o^{r re}^c^o^rdk^e^e^pⁱⁿ^g^re^quire^m^e^{nts. A}^v^a^ila^ble^a^t^http^://w^ww^.irs.^g^ov.
¹⁰^{U.S. C}^ong^re^{ss, Join}^{t Com}^m^itte^e^{on T}^a^x^a^tion,^Te^c^h^nic^a^l^Ex^pl^an^ati^on^{of H}^.^R^.³⁷⁶^8,^the^“K^atrⁱⁿ^a^Em^e^r^ge^nc^y^Tax
^Re^lie^{f Ac}^{t of}²⁰⁰⁵^”^as^p^a^s^s^e^{d by}^t^h^e^H^ous^e^an^{d the}^Seⁿ^a^te^oⁿ^Se^pte^m^be^r^21,²⁰⁰⁵^{, c}^o^m^m^itte^e^print,¹⁰⁹^th^Co^ng^.,¹^st
^s^e^s^s^.,^J^C^X-⁶⁹^-⁰^5,^Se^pte^m^be^r^{22, 200}^{5, p. 21}^,^r^e^pe^a^t^e^d^{on p. 23}^.
¹¹^{U.S. C}^ong^re^{ss, Join}^{t Com}^m^itte^e^{on T}^a^x^a^tion,^Te^c^h^nic^a^l^Ex^pl^an^ati^on^{of H}^.^R^.³⁷⁶^8,^the^“K^atrⁱⁿ^a^Em^e^r^ge^nc^y^Tax
^Re^lie^{f Ac}^{t of}²⁰⁰⁵^”^as^p^a^s^s^e^{d by}^t^h^e^H^ous^e^an^{d the}^Seⁿ^a^te^oⁿ^Se^pte^m^be^r^21,²⁰⁰⁵^{, c}^o^m^m^itte^e^print,¹⁰⁹^th^Co^ng^.,¹^st
^s^e^s^s^{., J}^C^X-⁶⁹^-⁰^{5, Se}^pte^m^be^r^22,²⁰⁰^5,^p.²⁴^.

For a volunteer using the optional charitable standard mileage rate, deductible travel costs are 14
cents per mile under current law. The taxpayer does not need to report as income mileage
reimbursements from a charitable organization up to the charitable standard mileage rate of 14
cents. But a volunteer should report as gross income reimbursement in excess of 14 cents per ¹²
mile.
Section 6041 of the Internal Revenue Code requires anyone engaged in a trade or business who
makes payments to another person of $600 or more in a taxable year to file an information return
(reporting the name and address of the recipient and the total amount of payments during the
year) with the IRS and with the person who received the payment. These are known as 1099
forms. Thus, a charitable organization that reimburses an individual volunteer for mileage by an
aggregate amount of $600 or more in a single tax year must file these information returns with the
IRS and the volunteer. Charitable organizations have complained about the “paperwork” burden
of these reporting requirements.

The standard mileage rates for charitable and for medical/moving purposes have traditionally
been set much lower than the rate for business purposes. That is because they reflect only the
“variable costs” of using an automobile. As shown in Table 2, in the case of the medical and
moving rates, variable costs include gasoline (and the federal, state, and local taxes thereon), oil,
maintenance, and tires and tire repairs. These are costs that are expected to vary in proportion to
the number of miles driven. In addition to these variable costs, the business standard mileage rate ¹³
also incorporates certain “fixed costs” of owning an automobile, specifically depreciation, ¹⁴
license and registration fees, and insurance.
This difference is based on the general reasoning that it is unlikely that an individual would
purchase a car primarily for the purpose of doing volunteer work, getting to medical
appointments, or moving his or her residence to locate near a new job. In contrast, needing a car ¹⁵
to do one’s job may be the primary reason for owning a vehicle.

¹²^F^o^{r a vo}^l^u^nt^{eer u}^sⁱⁿ^{g act}^u^a^l^co^st^s,ⁱ^f^t^h^{e vo}^l^uⁿ^t^{eer’s act}^u^a^l^d^e^du^ctⁱ^b^l^e^au^t^o^m^o^bⁱ^l^e^exp^eⁿ^s^{es exceed}^t^h^{e am}^{ount of}
^rei^m^b^u^r^se^men^t^recei^ved^,^t^h^{e vo}^l^uⁿ^t^{eer m}^a^{y cl}^ai^m^t^h^{e exc}^e^{ss (u}ⁿ^r^ei^m^b^u^r^sed^exp^eⁿ^s^{es) as an}ⁱ^t^e^mⁱ^zed^ch^ari^t^a^b^l^e
^de^duc^ti^on.
¹³^T^h^is^is^a^m^e^a^s^ur^e^of^ta^x^,^{not e}^c^o^nom^ic^{, de}^pr^e^cⁱ^a^tion^.
¹⁴^In^addⁱ^tⁱ^oⁿ^,ⁱⁿ^t^e^rest^rel^a^tⁱⁿ^{g t}^o^t^h^{e p}^u^r^ch^{ase o}^f^an^au^t^o^m^o^bⁱ^l^e^{as wel}^l^{as st}^at^{e an}^d^l^o^cal^p^e^rsoⁿ^a^l^p^r^op^ert^y^t^a^x^e^s^m^a^y
^be^de^d^u^c^t^e^d^s^e^pa^r^a^te^ly^{, to the}^e^x^te^{nt a}^llow^a^ble^un^de^r^I^R^C^Se^c^.¹⁶³⁽^ite^mⁱ^z^e^d^de^duc^tio^ns^f^o^r^inte^r^e^s^t⁾^or^Se^c^.¹⁶⁴
⁽^ite^mⁱ^ze^{d de}^duc^ti^ons^f^o^r^ta^x^e^s⁾^{, r}^e^s^p^e^c^tiv^e^l^y^.^Iⁿ^te^rⁿ^a^l^R^e^v^e^nue^Se^r^v^ic^e^,^Iⁿ^te^rⁿ^a^l^R^e^v^e^nue^B^u^lle^tiⁿ²⁰⁰⁷^-⁵^{0, R}^e^v^.^P^r^oc^.
²⁰⁰^7-^70,^D^e^c^e^m^b^e^r^10,²⁰^07,^Se^c^.^5.⁰⁴^un^de^r^b^u^sⁱ^ne^s^s^s^t^aⁿ^da^r^d^m^ile^a^g^e^r^a^t^e^{, r}^e^pe^a^t^e^d^{in Se}^c^.^7.⁰⁴^u^nde^r^c^h^a^r^ita^b^l^e
^a^{nd m}^e^dic^a^l^a^{nd m}^o^vⁱ^ng^s^t^a^nda^r^d^m^ile^ag^e^r^a^te^s^.
¹⁵^Inc^o^m^e^ta^x^de^duc^{tions a}^r^e^not^pe^rm^itte^{d f}^o^{r the}^e^x^pe^nse^s^of^c^o^m^m^u^ting^t^o^aⁿ^{d f}^r^om^a^job.

Table 2. Variable and Fixed Automobile Costs Incorporated in the IRS’s
Medical/Moving and Business Standard Mileage Rates
^{Cost Item}^Value
^{July - December 2008}
^{(in cents per mile)}
^{Deductible Variable Costs}
^{(included in both the}^{medical/moving and b}^usiness^{standard mileage rates)}
^{gasoline (and the federal, state, and local taxes thereon)}^NA
^oil^NA
^maintenanc^e^NA
^{tires and tire re}^pair^NA
^{Subtotal: Variable Costs =}²⁷
^{Medical and Moving Standard Mileage Rate}
^{Deductible Fi}^{xed Costs}
^(addit^{ional costs included only in the b}^usiness^{standard mileage rat}^e)
^{depreciation or lease payme}^nts²¹
^{license plate and car}^registration^fees^10.5
^insuran^{ce (per}^{sonal liability and property damage)}
^{Subtotal: Fixed Costs}^31.5
^Total^{: Variable + Fixed Costs =}^58.5
^{Business Standard}^{Mileage Rate}
^Sources:^{Calculations by CRS, explained in the}^{note below. Based on the sta}^{ndard mileage rates f}^{or July 1 -}
^December^{31, 2}⁰⁰^{8, of 2}⁷^ce^nts^{per mile for medical and moving}^{and 58.5}^cent^{s pe}^{r mile for b}^usin^{ess from U.S.}
^Department^{of the Trea}^{sury, I}^nte^{rnal Revenu}^{e Service (IRS), News Release IR-200}^{8-82, J}^une²^{3, 20}⁰^{8. The}
^{standard b}^usiness^{mileage rate for 20}⁰⁸^{was originally set at 50.5}^c^{ents pe}^{r mile. Of that, the}^amoun^{t the IRS}
^{assigned to depreciation was 2}¹^c^{ents pe}^{r mile. IRS, Rev. Proc}^{. 200}^{7-70, I}^nter^{nal Revenue}^{Bulletin 2}^007-^{50, Dec.}
^{10, 2}⁰⁰^{7, Section 4.04.}
^Notes:^{NA = not available. CRS}^{derived the n}^umbe^{rs s}^{hown in re}^{gular type}^{from the}^thr^{ee n}^umbe^{rs made}
^{available by the IRS (shown}ⁱⁿ^bo^ld^{), as foll}^{ows. The medical and}^{moving standard mileage rate of}^{27 ce}^nts^per
^{mile was defined as the s}^ubtotal^{of the deductible variable costs.}^{The bu}^{siness sta}^{ndard mileage ra}^{te of 58.5}^cents
^{per mile was defined as t}^{he total of deductible variable plus}^{fixed c}^{osts. The subtotal of fixed costs}^{was then}
^{calculated as the differe}^nce^betw^{een the}^b^{usiness a}^{nd the}^{medical/moving standard mileage rates, 5}^{8.5 - 2}^{7, or}
^{31.5 ce}^nts^{per mile. Finally, the IRS depreciation figure of 2}¹^cent^{s per mile was s}^ubt^{racted from t}^{otal fixed costs}
^{of 31.5 ce}^{nts, leaving 1}^{0.5 ce}^nts^p^{er mile as the cost assign}^{ed to license plate a}^{nd car}^{registration fe}^{es plus ca}^r
^insuran^{ce, combined.}
In relation to the Katrina Emergency Tax Relief Act of 2005, the Joint Committee on Taxation
provided the following explanation of why the charitable rate is lower than the business standard
mileage rate:
^T^h^{e s}^t^an^{dard m}^ileag^{e rate}^f^o^{r ch}^{aritable pu}^rpos^es^is^lo^w^e^{r t}^h^an^t^h^{e s}^t^aⁿ^{dard bu}^sⁱⁿ^e^s^s^rate
^becau^s^e^t^h^{e c}^h^{aritable rate cov}^e^rs^onl^y^th^{e o}^u^t^-^of-^pock^e^{t o}^p^eratin^g^e^x^pens^es⁽ⁱⁿ^c^l^u^ding
^g^a^so^liⁿ^e^an^d^o^il)^dⁱ^r^ectl^y^r^e^la^ted^to^th^{e u}^s^{e o}^f^t^h^{e a}^u^to^m^o^b^{ile in}^p^e^r^f^o^r^mⁱⁿ^g^th^{e d}^oⁿ^ated
^s^e^rv^ices^t^h^{at a tax}^p^a^y^er^m^a^y^de^du^{ct as}^{a ch}^{aritable con}^t^ribu^tioⁿ^.^T^h^{e ch}^{aritable rate d}^o^e^sⁿ^o^t
ⁱⁿ^cl^u^d^{e cos}^t^s^t^h^{at are n}^o^{t dedu}^{ctible as}^{a c}^h^ar^itab^l^{e co}ⁿ^t^rⁱ^b^u^tioⁿ^su^c^h^as^g^eⁿ^e^r^a^{l r}^e^p^a^ir^o^r

^m^aⁱⁿ^ten^aⁿ^{ce ex}^peⁿ^s^es^{, depreciation}^,ⁱⁿ^s^u^ran^{ce, a}ⁿ^{d reg}ⁱ^s^t^ration^f^ees^{. Su}^c^h^cos^t^s^are,¹⁶
^ho^w^e^ve^r^,ⁱⁿ^c^l^ud^e^dⁱⁿ^c^o^m^p^utⁱ^{ng t}^h^e^b^u^sⁱⁿ^e^ss^st^aⁿ^d^a^r^d^mⁱ^l^e^a^g^e^r^a^t^e^.
But the JCT did not explain reasons why, or based on what cost factors, the charitable rate had
been set higher than the medical/moving rate in the past and should be set even higher (at 70% of
the business standard mileage rate) for volunteer driving in the aftermath of Hurricane Katrina.
Nor had the JCT addressed this question in either 1984 or 1997, when Congress raised the ¹⁷
charitable rate above the medical/moving rate set by the IRS.
It is noteworthy that the IRS’s explanation to taxpayers of which charitable driving expenses are
deductible and not deductible suggests that the charitable standard mileage rate should be lower ¹⁸
than the medical/moving rate. At issue is whether or not maintenance and tire expenses are
deductible for charitable purposes. In Table 2 they are classified as variable costs reflected in the
medical/moving rate. In contrast, Table 3 shows that the only car expenses the IRS lists as
deductible for charitable purposes are gasoline and oil. In fact, the IRS explicitly states that
maintenance and tire expenses are not deductible, along with depreciation, car registration fees, ¹⁹
and insurance.
Table 3. Automobile Costs Deductible and Not Deductible as a Charitable Expense,
According to IRS Instructions to Taxpayers
^Deductible
^gasoline
^oil
^{Not Deductible}
^{general re}^{pair and mainte}^nance
^tires
^depreciation
^{registration fees}
^insuran^ce
^Source:^{U.S. Department of t}^he^{Treasury, I}^{nternal Reve}^{nue Ser}^vice,^{Your Federal Income Tax}^{, For Individuals, For}
^{use in}^prepa^{ring 2}⁰⁰⁷^Retu^{rns, P}^{ublication 17, p.}¹⁵^{7. The same in}^{formation can b}^e^fou^{nd in: IRS,}^C^haritab^le
^Contribution^s^,^{For use in pre}^paring²⁰^{07 Ret}^urn^{s, Publication 52}^{6, p}^.^{5. Available at http://www.irs.go}^{v under}
^{More Forms and Pu}^{blications. Se}^{e footnote 9, earlier in this re}^por^t.
This explanation to taxpayers is at odds, however, with definitions set forth in the IRS revenue
procedure that explains the optional standard mileage rates for 2008. According to Sec. 7.03 of

¹⁶^{U.S. C}^ong^re^{ss, Join}^{t Com}^m^itte^e^{on T}^a^x^a^tion,^Te^c^h^nic^a^l^Ex^pl^an^ati^on^{of H}^.^R^.³⁷⁶^8,^the^“K^atrⁱⁿ^a^Em^e^r^ge^nc^y^Tax
^Re^lie^{f Ac}^{t of}²⁰⁰⁵^”^as^p^a^s^s^e^{d by}^t^h^e^H^ous^e^an^{d the}^Seⁿ^a^te^oⁿ^Se^pte^m^be^r^21,²⁰⁰⁵^{, 10}⁹^th^Cong^.,¹^st^S^e^s^s^{., J}^C^X^-⁶⁹^-0^5,
^Se^pt.^22,²⁰⁰⁵^,^p.^21,^r^e^pe^a^t^e^d^oⁿ^p.^23.
¹⁷^D^e^s^c^rⁱ^ptions^of^the^inc^r^e^a^s^e^{in t}^h^e^c^h^a^r^ita^ble^s^t^a^nda^r^d^m^ile^a^g^e^r^a^{te m}^a^de^b^y^D^e^fⁱ^c^{it R}^e^duc^{tion A}^c^{t o}^f¹⁹⁸⁴^a^nd^the
^T^a^x^p^ay^e^r^R^e^lief^A^c^{t of}^{1997 a}^r^e^pr^e^s^eⁿ^te^{d la}^te^rⁱⁿ^th^is^r^e^por^{t, i}ⁿ^t^h^e^s^e^c^{tion o}ⁿ^L^e^gⁱ^s^l^a^tiv^e^Hⁱ^s^t^or^y^.
¹⁸^U^.^{S. D}^e^pa^r^t^m^e^{nt of}^the^T^r^e^a^s^ur^y^,^Iⁿ^te^rⁿ^a^l^R^e^v^e^nue^Se^r^v^ic^e^,^Yo^ur^Fe^de^r^a^{l I}ⁿ^c^o^m^e^Tax^,^F^o^r^Iⁿ^di^vi^d^u^al^s,^F^o^r^u^s^{e i}ⁿ
^pr^e^p^a^r^ing²⁰⁰⁷^R^e^turⁿ^s^,^Pu^blic^a^tⁱ^on^17,^p.¹^57.^T^h^e^s^a^m^e^inf^o^r^m^a^tⁱ^{on c}^aⁿ^be^f^oun^{d i}ⁿ^{: I}^R^S^,^C^h^ar^it^ab^le^C^ontrⁱ^but^ioⁿ^s,
^For^us^eⁱⁿ^pr^e^p^a^r^ing²⁰^{07 R}^e^t^u^rⁿ^s^,^P^u^blic^a^tio^{n 5}²⁶^,^p^.⁵^.
¹⁹^S^{ee f}^o^o^tⁿ^o^t^e⁹^f^o^{r t}^h^{e IRS}^’^{s i}ⁿ^st^r^u^ctⁱ^oⁿ^s^t^o^t^a^xp^ayers.

IRS Rev. Proc. 2007-70, the costs that are deductible as a charitable, medical, or moving expense
are “ ... all variable expenses (including gasoline and oil).... ” Elsewhere in Rev. Proc. 2007-70, ²⁰
Sec. 4.04 and Sec. 8.02(3) both list tires and routine maintenance and repairs as variable costs.
As indicated in Table 2, the value assigned by the IRS to the individual cost components of the
standard mileage rates, other than depreciation, is not publicly available, for proprietary and
confidentiality reasons. Consequently, we do not know what portion of the current 27 cent
medical/moving standard mileage rate set by the IRS reflects the cost of gasoline and oil, and
what portion reflects maintenance and tires. Therefore, we do not know how the value assigned to
gasoline and oil alone compares to the current statutory charitable standard mileage rate of 14
cents per mile.
More detailed information about the values assigned to the individual components of fixed costs
could help address the question of what additional costs might be included if Congress decides
that the charitable standard mileage rate should be higher than the medical/moving rate, but not as
high as the business rate. As shown in the bottom part of Table 2, CRS calculated the subtotal for
fixed costs as 31.5 cents per mile. Of that, the IRS attributed 21 cents per mile to depreciation.
That leaves 10.5 cents per mile covering the combined categories of license plate and car
registration fees, and car insurance.
These numbers can be used to suggest the following two examples of guidelines for setting a
middle-ground charitable standard mileage rate. If Congress instructed the IRS to include fixed
costs other than depreciation, in addition to variable costs, the charitable standard mileage rate
would currently be 37.5 cents per mile (equal to the 27-cent medical/moving rate plus the 10.5
cents for fixed costs other than depreciation). If Congress instructed the IRS to include
depreciation in addition to variable costs, the charitable rate would currently be 48 cents per mile
(equal to the 27-cent medical/moving rate plus the 21-cent depreciation allowance). Other
combinations of the cost components listed in Table 2, or even other automobile costs, could be
used to define the charitable standard mileage rate.

The IRS does not have data on income tax deductions taken for charitable mileage. Taxpayers
include the dollar value of any charitable mileage deductions they may be claiming together with ²¹
other charitable donations. Table 4 presents the information that is available from the IRS about
the number of tax returns filed for tax year 2006 that claimed an itemized deduction for charitable
contributions, by adjusted gross income (AGI) class. The number of returns claiming a mileage
deduction is likely to be far smaller than the total number claiming a deduction for charitable
contributions of any kind.

²⁰^In^t^e^rn^al^Reven^u^e^S^e^rvi^ce,^In^t^e^rⁿ^al^Reven^u^e^Bu^l^l^e^tⁱⁿ²⁰⁰⁷^-50^,^Rev.^P^r^o^c^.²⁰⁰⁷^-70^,^Decem^b^e^{r 1}⁰^,²⁰⁰⁷^.
²¹^A^s^out-^o^f^-^poc^k^e^{t e}^x^pe^ns^e^s^{, c}^h^a^r^ita^ble^m^ile^ag^e^de^duc^tio^ns^a^r^e^c^l^aⁱ^m^e^{d tog}^e^the^r^w^{ith ot}^he^r^c^h^a^r^ita^bl^e^gⁱ^f^t^s^m^a^de^by
^c^a^s^{h or}^c^h^e^c^k^on^line¹⁶^of^Sc^he^d^u^le^A⁽^f^or^itemⁱ^z^e^d^de^duc^tio^ns⁾^of^theⁱ^ndivⁱ^d^u^a^lⁱⁿ^c^o^m^e^ta^x^r^e^turⁿ^{. I}ⁿ^te^rⁿ^a^l^R^e^v^e^nue
^S^e^rvi^ce,²⁰⁰^{7 I}ⁿ^s^t^r^u^c^tio^ns^for^Sc^h^e^dule^s^{A &}^B⁽^F^or^m¹⁰⁴⁰⁾^,^{p. A}^-^8.

In order to receive a tax benefit from the charitable mileage deduction, a taxpayer must itemize
deductions, instead of claiming the standard deduction. As shown in the right-hand column of
Table 4, the likelihood of itemizing charitable contributions is higher, the higher the income
class.
Only 12% of taxpayers with adjusted gross income (AGI) below $50,000 itemized charitable
deductions for 2006. Still, this lowest of the AGI categories reported had the largest absolute
number of returns claiming a charitable deduction—11.5 million returns. They accounted for 28%
of the 41.4 million total number of returns claiming a charitable deduction for 2006.
About half (48%) of returns in the $50,000-$75,000 AGI class and two-thirds (66%) of returns in
the $75,000-$100,000 class claimed a charitable deduction. Taxpayers at the high end of the
income spectrum are the ones most likely to itemize; 82% of tax returns with AGI from $100,000
to $200,000 and 90% with AGI above $200,000 itemized charitable deductions for 2006. But
high-income taxpayers are probably more likely to make their charitable donations by check or
transfer of stock than to do volunteer driving.
Table 4. Tax Returns with Itemized Charitable Deduction, by Adjusted Gross Income
(AGI) Class, Tax Year 2006
⁽¹⁾⁽²⁾⁽³⁾⁽⁴⁾
^{Adjusted Gross}^{Number of}^{Number of}^Returns^{% of Retur}^{ns in AGI}^Class
^Income^Returns^{with a Charitable}^{with a Charitable}
^(AGI)^Deduction^Deduction
^{All Returns}^139,²³^0,75²^41,3^66,9²⁹³⁰
^{Under $}^50,0⁰⁰^93,2^23,6⁵²^11,5^01,6⁸⁷¹²
^$50,0⁰⁰^{- $7}^5,00⁰^18,7^12,4⁵⁴^8,98^1,55⁶⁴⁸
^$75,0⁰⁰^{- 10}^0,0⁰⁰^11,1^18,8⁶⁸^7,32^6,76⁶⁶⁶
^$10^0,00^{0 - $}²⁰^0,00⁰^12,0^99,4⁸¹^9,89^6,76⁰⁸²
^$20^0,00^{0 or more}^4,07^6,29⁷^3,66^0,16⁰⁹⁰
^Sources:^N^umbe^{rs of ret}^ur^{ns f}^r^{om Inter}^{nal Revenue}^{Service, Table 2.}^{Individual Income and Tax D}^{ata, by State}
^{and Size of Adjusted G}^{ross Inco}^me,^{Tax Year 2006, U.S. totals}^{. Availabl}^{e online at http://www.irs.gov, un}^{der TaxStats.}
^{Percentages in}^column^{4 were}^{calculated by CRS. For each row (e}^{ach adjusted gross income class),}^{the n}^umbe^r
^{of retur}^{ns with a}^{charitable dedu}^{ction (column 3) was divided by t}^{he total num}^{ber of}^retu^rns^{for th}^{e row or AGI}
^{class (column 2), and th}^{en m}^{ultiplied by 10}^0.
^Notes:^{The sample includes all tax ret}^urns^{filed for tax year}²⁰⁰⁶^,^{including those that we}^{re nonta}^{xable (had no}
^{tax liability) as well as those that were taxa}^{ble (had tax liability). Each AG}^{I class in}^Ta^{ble 4}^{includes all types of}
^retur^{ns—single, joint, head of household, and married filing separa}^tely.
The dollar value of the charitable mileage deduction depends upon the volunteer’s marginal tax
rate. “Marginal tax rate” typically refers to the highest rate (in the set of graduated tax rates) that
applies to the taxpayer’s taxable income. It is the marginal tax rate that determines the income tax
savings when a deduction is claimed.
Again, no data are available from the IRS about the marginal tax rates faced by charitable
volunteer drivers. Table 5 presents the marginal tax rate brackets for 2008, for single (column 1)
and joint returns (column 2). The marginal tax rates (column 3) apply to taxable income, not

adjusted gross income (AGI).²² The income cutoffs that separate the marginal tax rate brackets are
indexed for inflation each year.
All itemizers who choose to use the optional charitable standard mileage rate to calculate their
automobile expenses for volunteer work are permitted the same deduction of 14 cents per mile.
However, the amount of federal income tax that is actually saved per mile deducted varies
according to the taxpayer’s marginal tax rate. As shown in column 4 of Table 5, the tax saving is
worth 1.4 cents per mile at a 10% tax rate, but 4.9 cents per mile at a 35% tax rate. (Taxpayers
who do not itemize receive no tax saving.) In comparison, volunteers who are reimbursed for
charitable driving expenses may receive (up to) 14 cents per mile tax-free, regardless of their
marginal tax rate.
The ratio in column 5 of Table 5 compares the tax-free reimbursement of 14 cents per mile to the
tax savings from a deduction of 14 cents per mile, for each tax bracket. At every marginal tax
rate, volunteer drivers who receive tax-free reimbursement are better off than those who deduct
their mileage. The relative advantage of reimbursement is even greater for taxpayers in lower tax
brackets. In the two highest tax rate brackets of 33 percent and 35 percent, tax-free
reimbursement is worth roughly three times as much as a deduction. But at the lowest tax rate of

10%, tax-free reimbursement is worth ten times as much as a deduction.

Table 5. Tax-Free Reimbursement vs. Tax Saving from Deduction at 14 Cents Per
Mile under Current Law
^{(by Marg}^inal^{Tax R}^a^{te an}^{d T}^a^{xable Income Bra}^c^{ket for Tax}^{Year 2008)}
⁽¹⁾⁽²⁾⁽⁴⁾⁽⁵⁾
^{Taxable Income}^{Taxable Income}⁽³⁾^{Tax Saving Per}^{Value of}
^{Bracket for Single}^{Bracket for Mar}^ried^Marginal^{Charitable Mile}^{Reimbursement}
^{Filer (over but not}^{Filing Jointly (over}^{Tax Rate}^Deducted^Relativ^{e to Deduction}
^over)^{but not over)}
^{$0 - $}^8,02⁵^{$0 - $}^16,0⁵⁰^.10^$.014^10.0
^8,02^{5 - 3}^2,55⁰^16,0^{50 -}^65,1⁰⁰^.15^.021^6.7
^32,5^{50 -}^78,8⁵⁰^65,1^{00 -}¹³^1,45⁰^.25^.035^4.0
^78,8^{50 -}¹⁶^4,45⁰^131,⁴⁵^{0 - 2}^00,3⁰⁰^.28^.039^3.6
^164,⁴⁵^{0 - 3}^57,7⁰⁰^200,³⁰^{0 - 3}^57,7⁰⁰^.33^.046^3.0
^357,⁷⁰⁰^357,⁷⁰⁰^.35^.049^2.9
^Sources:^{Marginal ta}^{x rates}^and^{corresponding ta}^{xable income}^ba^{nds (columns}^{1 - 3) f}^{rom U.S. De}^partme^{nt of}
^{the Treasu}^{ry, Inte}^{rnal Reven}^{ue S}^{ervice, (Cost-of-Liv}^{ing Adjustmen}^{ts for 2}⁰⁰^{8), Rev. Proc. 2007-}^{6, Oct. 18, 2}⁰⁰^7;
^{also published in I}^nter^{nal Revenu}^{e Bulletin 200}^7-4^{5, Nov. 5, 2}^007.^{Income ta}^{x savings}^per^charitabl^{e mile}
^{deducted (column 4) we}^{re calcul}^{ated by CRS by m}^{ultiplying the c}^{haritable standard mileage rate of}^$0.1^{4 times}
^{the marginal tax}^{rates in}^column^{3. The ratio (column 5) is e}^{qual t}^o^{the tax-free}^reimb^urseme^{nt of}^$0.14^per
^{mile (applicable for all tax rate br}^{ackets) divided by the value of t}^h^e^{deduction per}^{mile in column 4}^.
Table 6 compares the federal income tax saving based on the current charitable standard mileage ^th
rate of 14 cents per mile with three alternative rates proposed in bills introduced in the 110
Congress. One proposal is to make the charitable rate equal to the medical/moving rate, set by the

²²^On^an^y^gi^ven^t^a^{x r}^e^t^u^rⁿ^,^t^a^xab^l^{e i}ⁿ^co^m^e^is^low^e^r^thaⁿ^A^G^I^b^y^the^s^u^m^of^pe^r^s^ona^{l e}^x^em^ptions^c^l^aⁱ^m^e^{d plus}^eⁱ^t^h^e^r^the
^sta^nda^rd^de^duc^ti^on^f^o^{r the}^f^iling^t^y^pe^{or the}^sum^of^the^ite^mⁱ^z^e^d^de^duc^ti^ons.

IRS at 27 cents per mile for the last half of 2008. Another proposal is to raise the charitable rate
up to the standard business mileage rate, set by the IRS at 58.5 cents per mile for the second half
of 2008. In between those two is the proposal restricted to volunteer driving in federally declared
disaster areas—to set the charitable rate at 70% of the business rate. For the second half of 2008,
that would equal 41 cents per mile (.70 time $0.585, rounded to the next highest cent). To make
the numbers easier to grasp, Table 6 shows the tax saving per 100 charitable miles deducted,
rather than per mile.
Table 6 reveals large differences in the taxes saved from a mileage deduction, depending upon
the taxpayer’s marginal tax rate and the value set for the charitable mileage rate. At one extreme,
shown in the upper left-hand corner of the table, a volunteer in the 10% rate bracket would save
$1.40 in taxes for every 100 charitable miles driven at the current 14-cent-per-mile rate. At the
other extreme, shown in the lower right-hand corner of the table, a taxpayer in the 35% rate
bracket would save $20.48 in taxes if the 100 miles could be deducted at the current business
mileage rate of 58.5 cents per mile.
Table 6. Income Tax Saving Per 100 Miles, by Marginal Tax Rate, for Alternative
Proposed Charitable Standard Mileage Rates
^{Alternative Proposed Charit}^{able Mileage Rat}^{es Based on}
^{Actual Standar}^{d Rates fo}^{r Jul}^{y - Dec. 200}^{8 ($ per mile)}
^{Marginal Tax}^{Current Cha}^ritable
^Rate^{Rate $0.14 P}^{er Mil}^e^Medical/^{70% of Business Rate}^{Business Rate}
^{Moving Rate}^$0.41^$0.58⁵
^$0.27
^{.10 $1.40}^$2.70^$4.10^$5.85
^{.15 2.10}^4.05^6.15^8.78
^{.25 3.50}^6.75^10.2⁵^14.6³
^.28^{3.92 7.56}^11.4⁸^16.3⁸
^{.33 4.62}^8.91^13.5³^19.3¹
^{.35 4.90}^9.45^14.3⁵^20.4⁸
^Source:^{Calculated by CRS. Eac}^{h cell is equal to the}^{marginal tax}^{rate (in the}^{first column), times t}^{he rate}^per
^{mile (stated in the column}^{heading), times 100.}
The notable differences in tax savings down each column (for a given mileage rate) raise the
question of whether the tax subsidy per mile should be given in the form of a tax credit, with
equal value to all taxpayers, rather than a deduction, whose value increases according to the
taxpayer’s marginal tax rate. The even larger differences in tax savings across each row (for a
given marginal tax rate) point to the importance of having Congress or the IRS justify any
differences among the standard mileage rates for different purposes.
As was shown previously in Table 5, under current tax law, volunteers who are reimbursed for
their driving expenses already receive more favorable treatment than those who deduct their ^th
mileage. Nonetheless, many of the charitable mileage bills introduced in the 110 Congress
would further increase the tax benefits for volunteers who are reimbursed for their driving

expenses relative to volunteers who deduct their unreimbursed car expenses. The proposals do not
explain the reason for this preferential treatment.
No data are available on the number of charitable miles that are reimbursed. But the number is
likely to be a small percentage of total charitable miles driven. If so, many more volunteers are
likely to be affected by the tax treatment of charitable mileage deductions than charitable mileage
reimbursements.
Under current tax law, a volunteer does not need to report as income reimbursement by a
charitable organization for out-of-pocket automobile expenses up to the charitable standard
mileage rate of 14 cents per mile. However, reimbursement in excess of the charitable standard
mileage rate is considered taxable income. Several bills would raise the tax-free reimbursement
rate to the standard business mileage rate, which is currently 58.5 cents per mile.
Table 7 first considers the tax treatment of a volunteer being reimbursed at 58.5 cents per mile
under current law. Column 2 of Table 7 shows the reimbursement per mile that remains after ²³
federal income tax (column 3), at each marginal tax rate (column 1), if a volunteer is reimbursed
at the current business standard mileage rate. The calculations assume that the volunteer is
reimbursed at $0.585 per mile and taxed on $0.445 per mile, which equals the reimbursement in
excess of the charitable standard mileage rate of $0.14 per mile. Column 3 repeats the
information from column 4 of Table 5 to show the tax savings from a deduction of 14 cents per
mile, at each marginal tax rate.
Column 4 of Table 7 shows the ratio of the value of the reimbursement (column 2) relative to the
value of the deduction (column 3), both after tax. It shows that the value of a 58.5-cent
reimbursement, even after tax, is 8.8 times the value of the 14-cent deduction for a taxpayer in the
top 35% tax rate bracket. For a taxpayer in the 10% bracket, the after-tax reimbursement would
be worth 38.6 times the value of the charitable standard mileage deduction.
Next, Table 7 considers the case where unreimbursed charitable mileage expenses could be
deducted at the current business standard mileage rate of 58.5 cents per mile, instead of 14 cents
per mile, but reimbursements would still be taxed as they are under current law. That is,
reimbursement in excess of 14 cents per mile would still be taxed. Column 5 shows the tax
savings per mile, at each tax rate, from a deduction at the current standard business rate of 58.5
cents per mile. Looking down column 2, as the marginal tax rate increases at higher income
levels, the value of the 58.5 cent reimbursement after tax declines, from 54.1 cents in the 10% tax
bracket, down to 42.9 cents in the 35% bracket. In contrast, the tax saving from a deduction of

58.5 cents (column 5) rises, from 5.9 cents per mile in the 10% bracket, to 20.5 cents in the 35%

bracket.
Column 6 of Table 7 shows the ratio of the after-tax value of a reimbursement of 58.5 cents,
under current tax rules, from column 2, relative to the tax saving from a deduction at the same
per-mile rate of 58.5 cents, from column 5. Even with this unfavorable tax treatment of mileage
reimbursements relative to mileage deductions, the after-tax value of the 58.5 cent reimbursement
under current law would still be worth twice as much as the tax saving from a deduction of 58.5
cents for taxpayers in the 35% rate bracket. For taxpayers in the 10% rate bracket, the after-tax
reimbursement would be worth nine times as much as the tax savings from the deduction.

²³^T^h^is^r^e^por^t^doe^s^{not a}^ddr^e^s^s^the^e^f^f^e^c^t^of^s^t^a^t^e^inc^o^m^e^ta^x^e^s^{on th}^e^v^a^lue^of^m^ile^ag^e^de^duc^tio^ns^or^r^e^im^bur^s^e^m^e^nts^.

Table 7. Reimbursement of 58.5 Cents After Tax vs. Tax Saving from Deduction at 14
Cents and at 58.5 Cents, by Marginal Tax Rate
^{Deduction at Business Milea}^ge
^{Current Law}^Rate
^{Deduction of}^{14 Cents}^{Deduction of}^{58.5 Cents}
^{Per Mile}^{Per Mile}
^{(2) Reimbursement}^{(3) Tax}^{(4) Value of}^{(5) Tax}^{(6) Value of}
⁽¹⁾^{of $0.585 Per Mil}^e,^Saving^{Reimbursement}^Saving^{Reimbursement}
^Marginal^{After Federal Tax}^from^Relativ^{e to}^from^Relativ^{e to}
^{Tax Rate}^{on $0.445}^Deduction^Deduction^Deduction^Deduction
^.10^{$.541 $.014 38.6 $.059}^9.2
^{.15 .518}^.021^{24.7 .088}^5.9
^{.25 .474}^.035^{13.5 .146}^3.2
^{.28 .460}^.039^{11.8 .164}^2.8
^.33^{.438 .046 9.5}^{.193 2.3}
^.35^{.429 .049 8.8}^{.205 2.1}
^Source:^{Calculated by CRS. The tax on t}^{he reimb}^urse^{ment (}^{not s}^{hown) is eq}^{ual to the marginal ta}^{x rate in}
^{column 1 times}^$0.4^{45 (t}^{he amo}^{unt of t}^{he reim}^burs^{ement of}^$0.5^{85 t}^{hat is in ex}^{cess of t}^{he c}^{haritable standard}
^{mileage rate of $0.1}^{4). Column 2}^{equals $}^0.58^{5 min}^{us t}^{he tax. Column}^{3 e}^{quals $}^{0.14 times}^{the ma}^{rginal tax}
^{rate in column}^{1. Column}^{4 is th}^{e ratio of column 2 to column}^3.^{Column 5 e}^{quals $}^0.58^{5 times t}^h^e^{marginal tax}
^{rate in column}^{1. Column}^{6 is th}^{e ratio of column 2 to column}^5.
The bills that would increase the tax benefits for charitable driving only if it is linked to a
federally declared disaster follow the rules set forth in KETRA. These bills would permit tax-free
reimbursement up to the full business standard mileage rate but only permit mileage deductions at
70% of the business mileage rate. This includes P.L. 110-343, enacted October 3, 2008, which
provides these enhanced tax benefits through the end of 2008 for charitable driving related to the
Midwestern disaster areas of 2008.
As previously illustrated in Table 5, tax-free reimbursement is worth far more than a deduction
even if they are the same dollar amount per mile. Setting the tax-free reimbursement amount
higher than the deductible amount would make the disparity in after-tax benefits even larger.
Column 2 of Table 8 shows the tax saving per mile from a charitable mileage deduction at 70%
of the business mileage rate, or 41 cents per mile at the current business rate. Column 3 shows the
ratio of 58.5 cents, the value of the tax-free reimbursement, to the tax saving from a 41-cent
deduction, from column 2. For taxpayers in the top 35% rate bracket, a tax-free reimbursement of
58.5 cents per mile would be worth four times as much as a deduction of 41 cents per mile. For
taxpayers in the lowest 10% bracket, the tax-free reimbursement would be worth 14.3 times as
much as the deduction per mile. Current proposals do not explain the reason for further increasing
the preferential tax benefits for mileage reimbursement relative to a mileage deduction.

Table 8. Disaster-Related Proposals: Tax-Free Reimbursement at 58.5 Cents vs.
Deduction at 41 Cents, by Marginal Tax Rate
⁽¹⁾⁽²⁾^{Tax Saving Per Mile from a}^{Deduction at}⁽³⁾^{Ratio of Tax-Free Reimburse}^{ment of $0.585}
^Marginal^{70% of Business Mileage Rate}^{, or $0.41}^{Per Mile Re}^lati^{ve to Value of Deduction at}
^{Tax Rate}^{Per Mile}^{$0.41 P}^{er Mile}
^{.10 $0.04}¹^14.3
^{.15 0.06}²^9.4
^{.25 0.10}³^5.7
^{.28 0.11}⁵^5.1
^{.33 0.13}^4.3
^{.35 0.14}⁴^4.1
^Source:^{Calculated by CRS as fo}^llows^{: 70% of t}^{he c}^urre^{nt b}^usines^{s mileage rate of 58.5}^cent^{s pe}^r^{mile equals 41}
^cents^{per mile. Column 2 e}^quals^$0.41^{times the}^{marginal tax}^rate^{in column}^{1. Column 3 e}^quals^$^0.58^{5 (the}
^curre^{nt b}^usines^{s mileage rate) divided by the ta}^{x saving in}^column^2.

Prior to the Deficit Reduction Act of 1984, the IRS set all three of the standard mileage rates. The
IRS typically set the same rate for charitable as for medical and moving expenses, and a much
higher rate for business purposes. In November 1979, in its last rate adjustment prior to the
Deficit Reduction Act, the IRS set the standard mileage rate for charitable, medical, and moving
expenses at nine cents per mile, effective in 1980. The business standard rate was set at 20 cents ²⁴
per mile for the first 15,000 miles, and 11 cents per mile above 15,000 miles. (See Table A-1.)
In 1984, Congress decided that the charitable mileage rate should be higher than the IRS-
determined rate of nine cents a mile. Sec. 1031 of the Deficit Reduction Act of 1984 (P.L. 98-369)
added Section 170(i) to the Internal Revenue Code. This set the charitable standard mileage rate,
by statute, at 12 cents per mile. The Joint Committee on Taxation’s (JCT’s) explanation of the law ²⁵
explicitly ended the IRS’s authority to adjust the charitable mileage rate. The other two standard
mileage rates continued to be set administratively by the IRS.
In its official explanation of the Deficit Reduction Act, the JCT gave the following reason for the
change in the law:

²⁴^Iⁿ^te^rⁿ^a^l^R^e^v^e^nue^Se^r^v^ic^e^,^R^e^v^.^Pr^oc^{. 8}²^-⁶^1,¹⁹^82-^{2 C}^.^B^.⁸^49;^a^l^s^o^r^e^le^a^s^e^d^a^s^I^R^{S N}^e^w^s^R^e^le^a^s^e^{No. I}^R^-^82-¹²^6,
^N^o^v^.^3,¹⁹⁸²^.
²⁵^“Sⁱⁿ^{ce un}^d^e^{r t}^h^{e A}^c^t^t^h^{e st}^an^d^a^r^d^mⁱ^l^eag^{e rat}^eⁱ^s^set^b^y^st^at^u^t^e,^t^h^{e In}^t^e^rn^al^Reven^u^e^S^e^rvi^{ce d}^o^e^{s no}^t^h^a^{ve au}^t^h^o^rⁱ^t^y
^t^o^ch^an^ge,^b^y^ad^mⁱⁿⁱ^st^ratⁱ^v^{e act}ⁱ^oⁿ^,^t^h^{e m}ⁱ^l^eag^{e rat}^e^f^o^{r p}^u^r^p^o^s^{es of}^co^m^p^u^tⁱⁿ^{g t}^h^{e c}^h^ari^t^a^b^l^{e d}^e^d^u^c^tⁱ^oⁿ^al^l^o^w^e^d^f^o^r
^us^e^of^a^pa^s^s^e^ng^e^r^a^u^tom^obileⁱⁿ^pe^r^f^or^mⁱ^ng^s^e^r^v^ice^s^f^o^r^a^c^h^a^r^ita^ble^or^g^a^niz^a^tion.”^U^.^{S. C}^ong^r^e^s^s^,^J^o^int^C^o^m^m^itte^e^on^th
^T^a^x^a^tion,^G^e^ne^r^a^l^Ex^plaⁿ^a^tio^{n o}^f^the^Re^v^e^nue^Pr^ov^is^ions^of^the^D^e^fic^{it Re}^duc^tⁱ^oⁿ^Ac^t^{of 1}⁹⁸⁴⁽^H^.R^{. 417}^{0, 98}^th
^C^ong^r^e^s^s^;^P^.^L^.^98-³⁶⁹⁾^{, 98}^Cong.²^d^sess.^,^co^m^m^{ittee p}^rⁱⁿ^{t JCS}^-⁴¹^-⁸⁴^,^Dec.³¹^,¹⁹⁸⁴^(W^ashⁱⁿ^g^ton^,^G^P^O,¹⁹⁸⁵⁾^,^pp^.
¹¹³^4.

^...C^on^g^r^es^s^believ^e^{d th}^{at t}^h^{e s}^t^an^{dard m}ⁱ^leag^{e rate allo}^w^e^{d f}^o^{r com}^p^u^t^a^tion^o^f^t^h^e^ch^a^rⁱ^t^a^b^l^e
^dedu^ctⁱ^oⁿ^f^o^{r us}^{e of}^{a pas}^s^e^ng^{er au}^t^o^m^obi^l^eⁱⁿ^provⁱ^dⁱⁿ^g^servⁱ^ces^t^o^{a ch}^ari^t^y^sh^ou^l^d^be
ⁱⁿ^creas^{ed to 12 cen}^ts^a^m^ile^{in or}^der^{to take into}^accouⁿ^{t ad}^{ditional out-}^o^f-p^o^{cket cos}^t^s^of²⁶
^oper^a^tⁱ^oⁿ^.^(Em^p^h^a^sⁱ^s^added.)
The additional costs were not specified in either the law or its accompanying official explanation
by the JCT.
The original House bill (H.R. 2014) contained no provision regarding the charitable mileage rate.
Section 767 of the Senate Amendment would have increased the standard charitable mileage rate
to 15 cents per mile, indexed for inflation (rounded down to the nearest cent). The conference ²⁷
agreement set the rate at 14 cents per mile, not indexed for inflation. Thus, Section 973 of the
Taxpayer Relief Act of 1997 (P.L. 105-34) increased the standard mileage rate for charitable use
of a passenger automobile from 12 to 14 cents per mile, effective in 1998, and where it remains
today. The only official reason that the JCT gave for the rate increase was that Congress believed ²⁸
it was appropriate.
For points of reference, when the legislation was being drafted in 1997, the IRS-determined
business standard mileage rate was 31.5 cents per mile and the medical/moving rate was 10 cents
per mile. The business rate had risen by about a penny per year, from 21 cents in 1985 to 31.5
cents in 1997. In contrast, the medical/moving rate had remained at 9 cents per mile from 1980
through 1995. It was raised to 10 cents per mile in 1996. (See Table A-1.)
Two special rules were included in the Katrina Emergency Tax Relief Act of 2005 (KETRA, P.L.

109-73) for taxpayers who used their personal vehicle for charitable work related to Hurricane ²⁹

Katrina along the Gulf Coast. These provisions were temporary and geographically restricted.
Both provisions were in effect for the 16-month period from August 25, 2005, through December

31, 2006, only. Taxpayers making use of these provisions were required to substantiate that ³⁰

expenses were incurred in providing relief related to Hurricane Katrina.
For purposes of calculating the charitable deduction, Section 303 of KETRA set the standard
mileage rate for Hurricane Katrina charity work at 70% of the standard business mileage rate in
effect at the time of such use (rounded to the next highest cent), instead of the 14-cents-per-mile

²⁶^{U.S. C}^ong^re^{ss, Join}^{t Com}^m^itte^e^{on T}^a^x^a^tion,^Gen^e^ra^l^E^x^p^l^aⁿ^a^tⁱ^oⁿ^o^f^t^h^{e R}^evenu^e^P^r^o^vⁱ^sⁱ^oⁿ^s^of^t^h^{e Def}ⁱ^cⁱ^t
^Re^duc^tioⁿ^Ac^{t of 19}⁸⁴^(H^.R.⁴¹⁷⁰^{, 98}^th^C^o^ng^r^e^s^s^;^P.L^.^98-³⁶⁹⁾^,⁹⁸^th^C^ong^.^{2d s}^e^s^s^{., c}^o^m^m^itte^e^pr^{int J}^C^S-^41-⁸⁴^{, D}^e^c^.
^{31, 19}⁸⁴⁽^W^a^s^hing^ton^,^G^P^O^,¹⁹⁸⁵⁾^,^pp.¹¹³³^.
²⁷^U^.^{S. C}^ong^r^e^s^s^,^H^ous^e^,^Tax^p^ay^e^r^Re^lie^{f Ac}^{t of}¹⁹⁹⁷^,^con^f^eren^{ce rep}^o^r^t^t^o^acco^m^p^an^y^H.^R.²⁰¹⁴^,¹⁰⁵^th^Cong^{., 1}^st
^s^e^s^s^{., H}^.^R^e^{pt. 1}^05-²²^{0, J}^u^ly^30,¹⁹⁹⁷^{, p}^p^.⁴⁸^4-⁸⁵^.
²⁸^{U.S. C}^ong^re^{ss, Join}^{t Com}^m^itte^e^{on T}^a^x^a^tion,^G^e^ne^r^a^l^Ex^pl^an^atio^{n of}^Tax^Le^gis^l^atio^{n E}^nac^te^dⁱⁿ¹⁹⁹⁷^{, 1}⁰⁵^th^Co^ng^.,
¹^st^s^e^s^s^{., J}^o^int^C^o^m^m^itte^e^P^rⁱⁿ^{t J}^C^S-^23-⁹⁷^{, D}^e^c^e^m^b^e^r^17,¹⁹⁹⁷⁽^W^a^s^hing^{ton: G}^P^O^,¹⁹⁹⁷⁾^{, p}^.¹⁶⁵^.
²⁹^For^a^s^u^m^m^a^r^y^of^e^a^c^h^of^the^s^e^c^tions^of^P.L^.¹⁰^9-⁷³^{, s}^e^e^C^R^S^R^e^por^{t R}^S²²²^69,^Katriⁿ^a^Eme^r^ge^nc^y^Tax^Re^lie^{f Ac}^t
^o^f²⁰⁰⁵^,^by^Er^ik^a^L^unde^r^,^O^c^{t. 2}⁴^,²⁰⁰⁵^.
³⁰^Su^bsta^ntia^ti^{on ty}^pic^a^lly^inc^l^ude^d^a^w^r^itte^{n re}^c^o^{rd of}^the^da^te^of^se^rv^ic^e^,^the^num^be^{r of}^m^ile^{s driv}^eⁿ^{, the}^na^m^e^{(s) of}
^ch^ari^t^a^b^l^{e o}^r^ganⁱ^zatⁱ^oⁿ⁽^{s) served}^,^t^h^{e l}^o^catⁱ^oⁿ^s^w^h^{ere t}^h^{e servi}^ces^w^e^r^e^p^r^o^vⁱ^d^ed^,^aⁿ^d^t^h^{e ch}^ari^t^a^bl^e^p^u^r^p^o^s^es.

standard charitable mileage rate set forth in IRC Sec. 170(i). As a result, the mileage rate for
charity work related to Hurricane Katrina was 29 cents per mile from August 25 through August

31, 2005; 34 cents per mile from September 1 through December 31, 2005; and 32 cents per mile ³¹

from January 1 through December 31, 2006. Sec. 304 of KETRA excluded from the gross
income of volunteers reimbursements from charitable organizations for mileage expenses, up to ³²
the standard business mileage rate.
The Heartland Disaster Tax Relief Act of 2008 was enacted on October 3, 2008, in conjunction
with the Emergency Economic Stabilization Act of 2008 (the financial rescue bill) as part of P.L.
110-343/H.R. 1424. Sections 702(e)(2) and 702(e)(3) of P.L. 110-343 modified the language of
Sections 303 and 304, respectively, of KETRA with simply a change in the applicable dates. Both
subsections substituted “beginning on the applicable disaster date and ending on December 31,

2008” for “beginning on August 25, 2005, and ending on December 31, 2006.” In the case of P.L.

110-343, the enhanced tax benefits for volunteer driving are restricted to the federally declared
Midwestern disaster areas of 2008. They are in effect from the date of the disaster until the end of

2008.

Both the tax-free and the deductible amount permitted per mile will differ, depending upon
whether the charitable driving occurred before or after July 1, 2008. Prior to July 1, 2008, the
business standard mileage rate was 50.5 cents per mile, and 70% of that is 35.4 cents per mile.
From July 1, 2008, through December 31, 2008, the business standard mileage rate is 58.5 cents
per mile, and 70% of that is 41 cents per mile.

Numerous bills have been introduced in the 110^th Congress that would increase the standard
mileage rate and/or the tax-free reimbursement rate for charitable driving. This section sorts the
bills into three groups. Bills in the first group would raise the charitable standard mileage rate,
each to a different level. The second group of bills would permit volunteers to exclude from their
taxable income mileage reimbursements up to the business standard mileage rate. (Five bills are
included in both the first and second groups.) The third group of bills would increase the tax
benefits only for charitable driving related to federally declared disasters, for a limited time
following the disaster. This section provides an overview discussion of the bills in each group.
Appendix B provides a brief description of each bill, organized according to the same three
groups.

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^Se^{pt. 22,}²⁰⁰⁵^,^Se^c^.³⁰^{3, pp}^.²¹^-²^2;^Se^c^.³⁰^{4, pp.}^23-²⁴^.

Twelve bills introduced in the 110^th Congress would raise the charitable standard mileage rate
used to calculate itemized deductions for charitable contributions. Each bill takes a different
approach. S. 1220 (Schumer) proposed a permanent increase in the charitable mileage rate to 30
cents per mile. Companion bills S. 3032 (Schumer) and H.R. 6283 (John Lewis) would
permanently increase the charitable rate to 40 cents per mile. H.R. 6368 (Brady) would make the
charitable rate equal to the medical/moving rate determined by the IRS. Companion bills S. 3429
(Schumer) and H.R. 6835 (Hall) would set the charitable rate at 70% of the business standard
mileage rate. H.R. 2020 (Platts) and S. 3421 (Casey) would raise the charitable mileage rate to the
standard business mileage rate, as periodically determined by the IRS. H.R. 606 (Hayes) would
raise the charitable rate to the standard business mileage rate only for emergency medical
responders and firefighters serving qualified volunteer fire departments. H.R. 6675 (Latta) would
permanently set at 58.5 cents per mile the standard mileage rate that applies to the delivery of
meals to homebound individuals who are elderly, disabled, frail, or at risk. H.R. 2415 (Paul)
would temporarily raise the charitable rate to the business rate when the price of gasoline is above
$3.00 per gallon.
S. 3246 (Cardin) would give the Secretary of the Treasury the authority to set the charitable rate.
Both H.R. 6854 (John Lewis) and S. 3532 (Cardin) would give the Secretary of the Treasury the
authority to set the charitable rate, but stipulate that it cannot be set lower than the medical
standard mileage rate. H.R. 7006 (Rangel), approved by the House on September 24, 2008, would
give the Secretary of the Treasury the authority to set the charitable mileage rate through
December 31, 2011, also subject to the proviso that it not be set lower than the medical standard
mileage rate at the time. With the medical standard mileage rate at 27 cents per mile, the JCT ³³
estimated that this provision would cost $441 million over the four FY2009-FY2012 combined.
Eight bills introduced in the 110^th Congress would exclude from taxable income reimbursements ^th
for charitable mileage up to the standard business mileage rate for all volunteers. In the 109 ³⁴
Congress, Section 301 of S. 6 (Santorum) and Section 1 of S. 315 (Feingold) would have
allowed charitable entities to reimburse volunteers for automobile expenses tax-free, up to the
optional standard mileage rate permitted for business use. This proposal was reintroduced by ^th
several bills in the 110 Congress. H.R. 606 (Hayes) would restrict this tax benefit to volunteer
emergency medical responders and firefighters. H.R. 1827 (Petri), H.R. 6854 (John Lewis), H.R.

6835 (Hall), S. 403 (Feingold), the Senate-approved version of H.R. 2419, S. 3429 (Schumer),

and S. 3532 (Cardin) would make this tax benefit available to all charitable volunteers.
These bills would add a new section (139B or 139C) to the Internal Revenue Code that would
exclude from a volunteer’s gross income mileage reimbursements from a charitable organization,
up to the business standard mileage rate (not just the charitable standard mileage rate). H.R. 1827

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(Petri), H.R. 6854 (John Lewis), S. 403 (Feingold), S. 3429 (Schumer), and S. 3532 (Cardin)
would exempt the charitable organizations from the reporting requirements on cash
reimbursements, but H.R. 606 (Hayes) and H.R. 2419 (Senate) would not.
In January 2008, when the business standard mileage rate was 50.5 cents per mile, the Joint
Committee on Taxation estimated that permitting volunteers to be reimbursed tax-free up to the
business standard mileage rate, rather than the 14-cent charitable mileage rate, would cost an
additional $2 million in lost tax revenue over the five-year period FY2008-FY2012 and $4 ³⁵
million over the 10-year period FY2008-FY2017.
Seven bills would restrict the enhanced tax benefits to volunteer driving related to a federally
declared disaster, for a limited period of time following the disaster. All but one of the bills in this
group provide for both an increase in the applicable standard mileage rate to 70% of the business
rate for purposes of the charitable deduction and an alternative exclusion of mileage
reimbursements up to the full business mileage rate. The bills borrow language from the Katrina
Emergency Tax Relief Act of 2005 (KETRA, P.L. 109-73). This includes the Heartland Disaster
Tax Relief Act of 2008, enacted on October 3, 2008, in conjunction with the Emergency
Economic Stabilization Act of 2008 (the financial rescue bill) as part of P.L. 110-343. This group
of bills also includes H.R. 6049 (as passed by the Senate on September 23, 2008), S.Amdt. 5035
(Grassley) to H.R. 3221, companion bills H.R. 6587 (Loebsack) and S. 3322 (Grassley), and S.
3335 (Baucus). H.R. 6958 (Brady) would increase only the tax-free reimbursement rate, and not
the deductible mileage rate.
Recall that Sec. 303 of KETRA permitted the standard mileage rate for charitable use of personal
vehicles in the provision of relief related to Hurricane Katrina, from August 25, 2005, through
December 31, 2006, to be equal to 70% of the standard business mileage rate in effect at the time
of such use (rounded to the next highest cent), instead of the 14 cents per mile standard charitable
rate set forth in IRC Sec. 170(i).
In addition, Sec. 304 of KETRA created a temporary exclusion from gross income for
reimbursements paid by a charitable organization for the individual’s use of his or her passenger
automobile “ ... for the benefit of such organization in connection with providing relief relating to
Hurricane Katrina during the period beginning on August 25, 2005, and ending on December 31,
2006.” Furthermore, reimbursements could be excluded at the full standard business mileage rate
in effect at the time of such use. This exclusion for mileage reimbursements was available only to
volunteers and not to people serving for compensation. Individuals who claimed a deduction for
their charitable mileage expenses could not also exclude the reimbursement of those expenses
from their reported income.
Six bills in this group offer these same two tax benefits for charitable driving but impose different
restrictions on the place and time of eligibility. Under P.L. 110-343, as well as H.R. 6049
(Senate), S.Amdt. 5035, and companion bills H.R. 6587/S. 3322, the tax benefits are restricted to
the presidentially declared Midwestern disaster areas of 2008. Under P.L. 110-343, as well as

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²⁰⁰^{8, p. 7.}

H.R. 6049 (Senate) and H.R. 6587/S. 3322, the tax benefits are available for charitable driving “
... beginning on the applicable disaster date and ending on December 31, 2008.” Under S.Amdt.
5035, they would be available “ ... beginning on the applicable disaster date and ending on
December 31, 2009.”
Under S. 3335, the tax benefits would be available to all federally declared disaster areas, for
disasters occurring in 2008 or 2009. The tax benefits would be available for charitable driving for

18 months following the disaster.

H.R. 6958 (Brady) would permit mileage reimbursements for volunteers in the Hurricane Ike
recovery area, which includes parts of Louisiana and Texas, to be tax-free up to the standard
business mileage rate, for the period beginning on September 12, 2008, and ending on December

31, 2008.

The Joint Committee on Taxation estimated the revenue loss from making KETRA’s enhanced tax
benefits for volunteer driving available to the Midwestern disaster areas, through December 31,

2008. On September 23, 2008, when the business standard mileage rate was 58.5 cents per mile,

the JCT estimated the cost of raising the charitable mileage rate to 70% of the business rate at $9
million, all in FY2009. The estimated cost of permitting mileage reimbursements to volunteers to ³⁶
be tax free up to the full business mileage rate was $1 million, all in FY2009.

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Table A-1. Optional Standard Mileage Rates for Business, Medical/Moving, and
Charitable Purposes, 1980 - 2008
^{(cents per mile)}
^{Year Business}^{Medical/Moving}^Charitable
¹⁹⁸⁰^{20 for t}^{he first}¹^5,00^{0 mi.}^{9 9}
^{11 a}^{bove 1}^5,00^{0 mi.}
¹⁹⁸^{1 20,}¹¹⁹⁹
¹⁹⁸^{2 20,}¹¹
¹⁹⁸^{3 20.5,}¹¹⁹⁹
¹⁹⁸^{4 20.5,}¹¹
¹⁹⁸⁵^{21, 1}¹⁹¹²
¹⁹⁸^{6 21,}¹¹¹²
¹⁹⁸^{7 22.5,}¹¹⁹¹²
¹⁹⁸^{8 24,}¹¹¹²
¹⁹⁸^{9 25.5,}¹¹⁹¹²
¹⁹⁹^{0 26}¹²
¹⁹⁹^{1 27.5}⁹¹²
¹⁹⁹^{2 28}¹²
¹⁹⁹^{3 28}⁹¹²
¹⁹⁹^{4 29}¹²
¹⁹⁹^{5 30}⁹¹²
¹⁹⁹^{6 31}¹⁰¹²
¹⁹⁹^{7 31.5}¹⁰¹²
¹⁹⁹⁸^{32.5 10}¹⁴
¹⁹⁹⁹^32.5^{before A}^{pril 1}^{10 14}
^{31 afte}^{r Ma}^rch³¹
²⁰⁰^{0 32.5}¹⁰¹⁴
²⁰⁰^{1 34.5}¹²¹⁴
²⁰⁰^{2 36.5}¹³¹⁴
²⁰⁰^{3 36}¹²¹⁴
²⁰⁰^{4 37.5}¹⁴¹⁴
²⁰⁰⁵^40.5^{before Septe}^mbe^{r 1}¹⁵¹⁴
^{48.5 aft}^{er Aug}^ust³¹²²
²⁰⁰^{6 44.5}¹⁸¹⁴
²⁰⁰^{7 48.5}²⁰¹⁴
²⁰⁰⁸^50.5^{before J}^{uly 1}¹⁹^{before J}^{uly 1}¹⁴

^{58.5 aft}^{er J}^une³⁰^{27 afte}^{r J}^une³⁰

^Sources:^Int^{ernal Reve}^{nue Servi}^{ce, annual re}^ven^{ue p}^rocedures^annou^{ncing th}^{e standard}^{mileage rates. Jennifer}
^{Teefy of the CRS Knowledge Service Group}^{helped as}^{semble t}^{his information.}
^Note:^{Noted in}^bold^{are the}^ye^{ar and the}^{level at which t}^{he c}^har^{itable mileage rates set by legislation first took}
^effect.

For a short comparison of the bills within each of the three groups that follow, see the last section ^th
of the report, “Overview of Bills in the 110 Congress.”
Volunteer Emergency Responder Fair Mileage Act of 2007. Introduced January 22, 2007; referred
to the Committee on Ways and Means. The tax benefits of H.R. 606 would be restricted to
volunteer emergency medical responders and firefighters.
For volunteer emergency medical responders and firefighters who are deducting their
unreimbursed expenses for use of a passenger automobile for volunteer purposes, Section 3 of
H.R. 606 would amend IRC Sec. 170(i) to provide that their standard mileage rate would be the
standard rate for business purposes (not the 14 cents per mile rate permitted for other charitable
mileage deductions). Furthermore, H.R. 606 would allow this mileage deduction whether or not
the taxpayer itemizes other deductions.
Section 2 of H.R. 606 would exclude from gross income the reimbursement of auto operating
expenses by a qualified volunteer fire department, at the IRS’s standard business mileage rate.
Introduced April 24, 2007; referred to the Committee on Ways and Means. H.R. 2020 would
amend IRC Sec. 170(i) to change the standard mileage rate for charitable purposes from a fixed
rate of 14 cents per mile to the standard mileage rate for business purposes, which is revised
periodically by the Secretary of the Treasury.
Affordable Gas Price Act. Introduced May 21, 2007; referred to three committees: Ways and
Means, Natural Resources, and Financial Services. Section 7(a) of H.R. 2415 would set a floor of
70 cents per mile on the optional standard mileage rate to be used for computing the deductible
costs of operating an automobile for business purposes. Section 7(b) provides that for any day
when the highway motor fuel taxes are suspended, the optional standard mileage rates to be used
for computing the deductible costs of operating an automobile for medical, moving, and
charitable purposes shall be the same as the rate in effect that day for business purposes. Under
those circumstances, the 14 cents per mile rate provided in IRC Sec. 170(i) for the charitable
mileage deduction would not apply. Under section 6 of the bill, the highway motor fuel taxes
would be suspended when the weekly U.S. retail price of regular gasoline, including the federal
excise tax, is greater than $3.00 per gallon.

One of the two amendments offered by Representative Brady to H.R. 6275, a bill to patch the
alternative minimum tax (AMT), would have raised all of the standard mileage rates by 33.7%
above their January 1, 2008, levels, to reflect the 33.7% increase in the price of gasoline since the
beginning of the year. The amendment would have set the business standard mileage rate at 67.5
cents per mile. It would have set the charitable rate at the same level as the medical care and
moving rate, at 25.4 cents per mile. (The amendment also would have struck the provision in
H.R. 6275 that limited the domestic manufacturing deduction for U.S. oil and gas companies.)
This Brady amendment was rejected by a vote of 17-20 in the Ways and Means Committee ³⁷
markup of H.R. 6275 on June 18, 2008.
Reimbursing Our American Drivers (ROAD) Act of 2008. Introduced June 17, 2008; referred to
the Committee on Ways and Means and the Committee on Oversight and Government Reform.
Companion to S. 3032 (Schumer). H.R. 6283 would permanently increase the standard mileage
rate for charitable use of an automobile from 14 cents to 40 cents per mile. For 2008 only, H.R.
6283 would increase the standard mileage rate to 70 cents per mile for calculating deductions
related to the use of an automobile for business, medical care, or moving purposes, and for
determining the reimbursement rate for federal employees on official business.
Introduced June 25, 2008; referred to the Committee on Ways and Means. H.R. 6368 would
repeal the current 14 cents per mile standard rate for charitable activities. Instead, it would amend
IRC Sec. 170(i) to make the charitable standard mileage rate equal to the standard rate determined
by the IRS for purposes of the medical care and moving expense deductions. Temporarily, from
the date of enactment until the end of 2008, the standard mileage rate for business, medical, and
moving purposes would not be less than one-third greater than the rate in effect for each category
on January 1, 2008, or the rate prescribed by the IRS for the category, whichever is higher.
Introduced July 30, 2008; referred to the Committee on Ways and Means. H.R. 6675 would
permanently set at 58.5 cents per mile the standard mileage rate that applies to “ ... the delivery of
meals to homebound individuals who are elderly, disabled, frail or at risk.”
Giving Incentives to Volunteers Everywhere Act of 2008 or the GIVE Act of 2008. Introduced
September 8, 2008; referred to the Committee on Ways and Means. Companion to S. 3429
(Schumer). Section 2 of H.R. 6835 would set the charitable mileage rate at 70% of the business
rate at the time. Section 3 would add a new Section 139C to the IRC permitting tax-free

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^Av^a^ila^ble^online^a^t^htt^p^://w^ww^.c^q^.^c^o^m^.

reimbursement for charitable mileage up to the full business standard mileage rate. Charitable
organizations would be exempt from IRS reporting requirements on these reimbursements.
Introduced September 10, 2008; referred to the Committee on Ways and Means. H.R. 6854 would
give the Secretary of the Treasury the authority to set the charitable standard mileage rate.
However, H.R. 6854 stipulates that the charitable rate shall not be less than the medical standard
mileage rate. H.R. 6854 would permit reimbursement for charitable mileage to be tax-free up to
the business standard mileage rate.
Disaster Tax Relief Act of 2008. Introduced September 23, 2008; referred to the Committee on
Ways and Means. Passed by the House, 419-4, on September 24. H.R. 7006 would give the
Secretary of the Treasury the authority to set the charitable standard mileage rate through
December 31, 2011. Like H.R. 6854, H.R. 7006 stipulates that the charitable rate shall not be less
than the medical standard mileage rate, which is currently 27 cents per mile. Despite the name of
the bill, this change in the charitable standard mileage rate would apply to all charitable use of a
passenger vehicle, not just driving related to a federally-declared disaster. H.R. 7006 includes
other disaster tax relief provisions.
Reimbursing Our American Drivers (ROAD) Act of 2007. Introduced April 25, 2007; referred to
the Committee on Finance. S. 1220 proposed a permanent increase in the charitable mileage rate
to 30 cents per mile and a temporary increase, for 2007 only, in the business, medical, and
moving standard mileage rates and the federal reimbursement rate, to 60 cents per mile.
Reimbursing Our American Drivers (ROAD) Act of 2008. Introduced May 19, 2008; referred to
the Committee on Finance. Companion to H.R. 6283 (John Lewis). S. 3032 would permanently
increase the standard mileage rate for charitable use of an automobile from 14 cents to 40 cents
per mile. For 2008 only, S. 3032 would increase the standard mileage rate to 70 cents per mile for
calculating deductions related to the use of an automobile for business, medical care, and moving
purposes, and for determining the reimbursement rate for federal employees on official business.
S. 3032 supplants S. 1220 (Schumer).
Fair Deal for Volunteers Act of 2008. Introduced July 10 (legislative day, July 9), 2008; referred
to the Committee on Finance. S. 3246 would amend IRC Sec. 170(i) to give the Secretary of the
Treasury the authority to set the charitable standard mileage rate.

Introduced August 1, 2008; referred to the Committee on Finance. S. 3421 would set the
charitable standard mileage rate equal to the business standard mileage rate determined by the
Secretary of the Treasury.
Giving Incentives to Volunteers Everywhere (GIVE) Act of 2008. Introduced August 1, 2008;
referred to the Committee on Finance. Section 2 of S. 3429 would amend Sec. 170(i) of the IRC
to set the charitable standard mileage rate equal to 70% of the standard business mileage rate.
(For example, at the current business mileage rate of 58.5 cents per mile, the charitable rate
would be 41 cents per mile.) Section 3 of S. 3429 is nearly identical to Section 1 of S. 403. It
would permit volunteers to exclude from their gross income mileage reimbursements from
charitable organizations, up to the standard business mileage rate. It would also exempt the
charitable organizations from IRS reporting requirements on those reimbursements.
Giving Incentives to Volunteers Everywhere Act of 2008 or the GIVE Act of 2008. Introduced
September 22 (legislative day, September 17), 2008; referred to the Committee on Finance.
Section 2 of S. 3532 would amend IRC Sec. 170(i) to give the Secretary of the Treasury the
authority to set the charitable standard mileage rate, for purposes of the itemized charitable
deduction, on the condition that it not be set lower than the medical standard mileage rate. Section
3 of S. 3532 would add a new Sec. 139C to the IRC permitting charitable mileage reimbursement
to be tax-free up to the business standard mileage rate.
Volunteer Emergency Responder Fair Mileage Act of 2007. Introduced January 22, 2007; referred
to the Committee on Ways and Means. H.R. 606 would restrict to volunteer emergency medical
responders and firefighters a new exclusion from gross income for mileage reimbursements, up to
the standard business mileage rate. Section 2 of H.R. 606 would add a new section 139B to the
Internal Revenue Code to exclude from gross income the reimbursement of auto operating
expenses by a qualified volunteer fire department, at the IRS’s standard mileage rate for operating
a passenger automobile for business purposes. Unlike H.R. 1827 and S. 403, H.R. 606 does not
include an exemption from reporting requirements for the qualified volunteer fire department that
pays the reimbursements.
H.R. 606 also contains special provisions for volunteer emergency medical responders and
firefighters who are not reimbursed and who are instead deducting their expenses for use of a
passenger automobile for volunteer purposes. Section 3 of H.R. 606 would amend IRC Sec.
170(i) to provide that their standard mileage rate would be the standard rate for business
purposes, and not the 14 cents per mile rate permitted for other charitable mileage deductions.

Furthermore, H.R. 606 would allow this mileage deduction whether or not the taxpayer itemizes
other deductions.
Introduced March 29, 2007; referred to the Committee on Ways and Means. H.R. 1827 is nearly
identical to section 1 of S. 403 (Feingold). H.R. 1827 would add a new section 139B to the
Internal Revenue Code, in the portion of the code that defines exclusions from gross income.
Volunteers would not need to include in their gross income reimbursements received from
nonprofit charitable organizations for the operating expenses of a passenger automobile used to
benefit the organizations, at the IRS’s standard business mileage rate. The taxpayer could not use
this exclusion if a deduction or credit was claimed for the same auto expenses. The charitable
organization would be exempt from the general requirement to report—to both the IRS and the
recipient—compensation payments to an individual of $600 or more in a taxable year.
H.R. 1827 includes an additional subsection (not included in S. 403) that restricts the application
of the reimbursement exclusion to volunteer services, and not to any expenses related to services
performed for compensation. Provisions similar to H.R. 1827, minus the exemption from
reporting requirements, were included in the version of the farm bill, H.R. 2419, approved by the
Senate, but were not included in the final Food, Conservation, and Energy Act of 2008, P.L. 110-³⁸

234.

Food and Energy Security Act of 2007, as approved by the Senate on December 14, 2007. This
was a Senate amendment in the nature of a substitute to H.R. 2419. Section 12803 of the Senate
amendment was similar to the provision included in Section 1 of S. 403 (Feingold) and in H.R.
1827 (Petri), except that it did not include the exemption from reporting requirements. The
Senate-passed amendment to H.R. 2419 would have added a new section 139B to the Internal
Revenue Code, in the portion of the code that defines exclusions from gross income. Volunteers
would not need to include in their gross income reimbursements received from nonprofit
charitable organizations for the operating expenses of a passenger automobile used to benefit the
organizations, at the IRS’s standard business mileage rate. The taxpayer could not use this
exclusion if a deduction or credit was claimed for the same auto expenses. This provision was not
included in the final version of the Food, Conservation, and Energy Act of 2008, enacted as P.L.

110-234 on May 22, 2008.

Giving Incentives to Volunteers Everywhere Act of 2008 or the GIVE Act of 2008. Introduced
September 8, 2008; referred to the Committee on Ways and Means. Companion to S. 3429
(Schumer). Section 3 of H.R. 6835 would add a new Section 139C to the IRC permitting tax-free
reimbursement for charitable mileage up to the business standard mileage rate. Charitable
organizations would be exempt from IRS reporting requirements on these reimbursements.
Section 2 would set the charitable mileage rate at 70% of the business rate at the time.

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Introduced September 10, 2008; referred to the Committee on Ways and Means. H.R. 6854 would
permit reimbursement for charitable mileage to be tax-free up to the business standard mileage
rate, through a new Section 139C of the Internal Revenue Code. It would exempt charitable
organizations from IRS reporting requirements on those reimbursements. Like S. 3246 (Cardin),
H.R. 6854 would give the Secretary of the Treasury the authority to set the charitable standard
mileage rate. However, H.R. 6854 stipulates that the charitable rate shall not be less than the
medical standard mileage rate.
Introduced January 26, 2007; referred to the Committee on Finance. Section 1 of S. 403 would
add a new section 139B to the Internal Revenue Code, in the portion of the code that defines
exclusions from gross income. Volunteers would not need to include in their gross income
reimbursements received from nonprofit charitable organizations for the operating expenses of a
passenger automobile used to benefit the organizations, at the IRS’s standard business mileage
rate. The taxpayer could not use this exclusion if a deduction or credit was claimed for the same
auto expenses. The charitable organization would be exempt from the general requirement to
report—to both the IRS and the recipient—compensation payments to an individual of $600 or ^th
more in a taxable year. S. 403 is identical to S. 315 (Feingold) in the 109 Congress.
Section 1 of S. 403, regarding mileage reimbursements to charitable volunteers, is nearly identical
to H.R. 1827 (Petri). Provisions similar to section 1 of S. 403, minus the exemption from
reporting requirements, were included in the version of the farm bill, H.R. 2419, approved by the
Senate, but were not included in the final Food, Conservation, and Energy Act of 2008, P.L. 110-

234.

Giving Incentives to Volunteers Everywhere (GIVE) Act of 2008. Introduced August 1, 2008;
referred to the Committee on Finance. Companion to H.R. 6835 (Hall). Section 3 of S. 3429 is
nearly identical to Section 1 of S. 403. It would permit volunteers to exclude from their gross
income mileage reimbursements from charitable organizations, up to the standard business
mileage rate. It would also exempt the charitable organizations from IRS reporting requirements
on those reimbursements. Section 2 of S. 3429 would amend Sec. 170(i) of the IRC to set the
charitable standard mileage rate equal to 70% of the standard business mileage rate. (At the
current business mileage rate of 58.5 cents per mile, for example, the charitable rate would be 41 ³⁹
cents per mile.)
Giving Incentives to Volunteers Everywhere Act of 2008 or the GIVE Act of 2008. Introduced
September 22 (legislative day, September 17), 2008; referred to the Committee on Finance.
Section 3 of S. 3532 would add a new Sec. 139C to the IRC permitting charitable mileage

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reimbursement up to the business standard mileage rate to not be included in gross income for tax
purposes. The charitable organization would be exempt from IRS reporting requirements on these
reimbursements. Section 2 of S. 3532 would amend IRC Sec. 170(i) to give the Secretary of the
Treasury the authority to set the charitable standard mileage rate for purposes of the itemized
charitable deduction, provided that it not be set less than the medical standard mileage rate.
The Heartland Disaster Tax Relief Act of 2008 is Title VII of P.L. 110-343, which also includes
the Emergency Economic Stabilization Act of 2008 (the financial rescue bill). Sections 702(e)(2)
and 702(e)(3) of P.L. 110-343 modified the language of Sections 303 and 304 of KETRA with
simply a change in the applicable dates. Both subsections substituted “beginning on the
applicable disaster date and ending on December 31, 2008” for “beginning on August 25, 2005,
and ending on December 31, 2006.” The enhanced tax benefits for volunteer driving are restricted
to the Midwestern disaster areas of 2008. The two tax provisions in P.L. 110-343 relevant to
charitable mileage are identical to those in three other Midwestern disaster area tax relief bills:
H.R. 6049 (as amended and passed by the Senate) and companion bills H.R. 6587 (Loebsack)/S.

3322 (Grassley).

H.R. 1424 (Kennedy) was introduced March 9, 2007, as the Paul Wellstone Mental Health and
Addiction Equity Act of 2007. It first passed the House on March 5, 2008, with the addition of the
Genetic Information Nondiscrimination Act of 2008. On September 29, 2008, the House defeated
the initial financial rescue bill proposed by Treasury Secretary Henry Paulson, H.R. 3997 as
amended by the House. In a second attempt to pass a financial rescue bill, the Senate approved an
amendment in the nature of a substitute to H.R. 1424 by a vote of 74-25 on October 1, 2008. The
House then agreed to the Senate amendment by a vote of 263-171 on October 3. The bill was
signed by the President a few hours later and became P.L. 110-343.
P.L. 110-343 contains five separately named acts. In addition to the Heartland Disaster Tax Relief
Act of 2008 and the Emergency Economic Stabilization Act of 2008 (the financial rescue bill),
P.L. 110-343 also includes the Energy Improvement and Extension Act of 2008 (containing
energy tax incentives), the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction
Equity Act of 2008, and the Tax Extenders and Alternative Minimum Tax Relief Act of 2008. The
law includes numerous other individual provisions as well.
Tax Extenders and Alternative Minimum Tax Relief Act of 2008, as amended and passed by the
Senate on September 23, 2008. H.R. 6049 (Senate) would modify the language of Sections 303
and 304 of KETRA with simply a change in the applicable dates. It would substitute “beginning
on the applicable disaster date and ending on December 31, 2008” for “beginning on August 25,
2005, and ending on December 31, 2006.” It would restrict the enhanced tax benefits to volunteer
driving related to the Midwestern disaster areas of 2008. H.R. 6049 would make numerous other
changes to the Internal Revenue Code. The two charitable mileage provisions in H.R. 6049 were
included in P.L. 110-343.

Midwestern Disaster Tax Relief Act of 2008. Introduced July 23, 2008; referred to the Committee
on Ways and Means. Companion to S. 3322 (Grassley). H.R. 6587 would modify the language of
Sections 303 and 304 of KETRA with simply a change in the applicable dates. It would substitute
“beginning on the applicable disaster date and ending on December 31, 2008” for “beginning on
August 25, 2005, and ending on December 31, 2006.” H.R. 6587 would make numerous other
changes to the Internal Revenue Code, all targeted to the presidentially declared Midwestern
disaster area. The two charitable mileage provisions in H.R. 6587 were included in P.L. 110-343.
Hurricane Ike Tax Relief Act of 2008. Introduced September 18, 2008; referred to the Committee
on Ways and Means. H.R. 6958 would apply section 304 of KETRA, but not section 303, to the
Hurricane Ike recovery area, which includes parts of Louisiana and Texas. H.R. 6958 would
permit mileage reimbursements for volunteers to be tax-free up to the standard business mileage
rate, for the period beginning on September 12, 2008, and ending on December 31, 2008. H.R.

6958 also would apply other provisions of KETRA to the Hurricane Ike recovery area.

Senate Amendment to Dodd-Shelby Amendment (S.Amdt. 4983) to H.R. 3221, the Housing
Rescue and Foreclosure Prevention Act of 2008. Submitted June 24, 2008; was not voted on. The
Grassley amendment would have added to H.R. 3221 a section entitled “Temporary Tax Relief
for Areas Damaged by 2008 Midwestern Severe Storms, Tornados, and Floods.” It contained
many of the same benefits that were included in the Katrina Emergency Tax Relief Act of 2005
(KETRA, P.L. 109-73). The two provisions addressing the charitable standard mileage rate were
included in subsection (e)(2) of the first section of the Grassley amendment.
The Grassley amendment would have made the two special charitable standard mileage rates
available to volunteers serving in Midwestern areas declared as disaster areas by the President
between May 20, 2008, through July 31, 2008. The tax benefits would have been available for
charitable driving “ ... beginning on the applicable disaster date and ending on December 31,

2009.”

Midwestern Disaster Tax Relief Act of 2008. Introduced July 23, 2008; referred to the Committee
on Finance. Companion to H.R. 6587 (Loebsack). S. 3322 would modify the language of Sections
303 and 304 of KETRA with simply a change in the applicable dates. It would substitute
“beginning on the applicable disaster date and ending on December 31, 2008” for “beginning on
August 25, 2005, and ending on December 31, 2006.” S. 3322 would make numerous other
changes to the Internal Revenue Code, all targeted to the presidentially declared Midwestern
disaster area. The two charitable mileage provisions in S. 3322 were included in P.L. 110-343.

Jobs, Energy, Families, and Disaster Relief Act of 2008. Also referred to as the Democratic
Senate extenders bill. Introduced July 24 (legislative day, July 23), 2008; read the second time
and placed on the calendar July 25, 2008. Four attempts to invoke cloture on the bill before July

31 failed. Sec. 505 of S. 3335 would add a new Section 1400U to the Internal Revenue Code,

labeled “Tax Benefits for Federally Declared Disasters.” It replicates 11 of the provisions enacted
by KETRA following Hurricane Katrina. In particular, S. 3335 provides that, in the case of a
federally declared disaster, for 18 months following the disaster, under subsection 1440U(h) the
standard mileage rate for charitable use of vehicles would be raised to 70% of the standard
business mileage rate at the time of such use (rounded to the next highest cent). Under subsection
1400U(i) volunteers could exclude from their gross income reimbursement (of operating
expenses with respect to use of a passenger automobile for the benefit of a charitable
organization) up to the full business standard mileage rate. The tax provisions would apply to any
federally declared disaster occurring in 2008 or 2009.
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