[Congressional Record Volume 145, Number 27 (Monday, February 22, 1999)]
[Senate]
[Pages S1733-S1734]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ENZI (for himself and Mr. Thomas):
  S. 435. A bill to amend the Internal Revenue Code of 1986 to allow 
the Secretary of the Treasury to waive the contemporaneous 
substantiation requirement for deduction of charitable contributions in 
certain cases; to the Committee on Finance.


                  The Equity in Charitable Giving Act

 Mr. ENZI. Mr. President, I rise today to introduce a bill that 
will help reform America's tax system. The bill I introduce today is 
designed to advance the important goal of encouraging charitable 
contributions. With this proposal, I add my voice to the Republican 
chorus in the Senate and House of Representatives calling for reform of 
our tax system to make it fairer and less burdensome for all Americans.
  The bill I introduce today is the Equity in Charitable Giving Act. 
This legislation, which is also cosponsored by the senior Senator from 
Wyoming, Senator Thomas, would provide relief for taxpayers who have 
had legitimate charitable contributions disallowed by the IRS because 
of a technical change Congress made to the Tax Code in 1993. In that 
year, a change was made to section 170 of the Internal Revenue Code 
dealing with the documentation required by taxpayers to claim 
charitable contributions. The new change required taxpayers to have a 
``contemporaneous written acknowledgment'' of their contributions for 
all contributions they claimed over $250 in a taxable year.
  While the purpose of this change was understandable, the rule 
espoused was too broad and it has in turn yielded some harsh results. 
Some taxpayers, unaware of the change in the law, did not receive the 
necessary acknowledgment before they filed their taxes. This oversight 
is understandable. For example, a taxpayer who filed his taxes in 
February may not have received the necessary documentation from the 
affected charities prior to filing his taxes. Under the current rule, 
any contributions over $250 would be disallowed even if he received the 
proper documentation before his taxes were due on April 15th. As a 
result of the very narrow definition of ``contemporaneous'' found in 
section 170(f)(8)(C), a number of taxpayers have had their otherwise 
lawful charitable contributions disallowed by the Internal Revenue 
Service. This punitive rule elevates form over substance and places an 
unwarranted burden on those generous taxpayers desiring to make their 
communities better places in which to live.
  The Equity in Charitable Giving Act, which I introduce today, has one 
simple purpose: to provide tax relief for those taxpayers who fell 
through the cracks when the law on charitable contributions was 
changed. While this bill would still require taxpayers to receive the 
proper documentation from the charitable organization, taxpayers would 
have a longer time to file this written acknowledgment with the 
Internal Revenue Service. In order to take advantage of this 
flexibility, taxpayers would also have to demonstrate

[[Page S1734]]

to the satisfaction of the Secretary of the Treasury that no goods or 
services were received from the tax exempt organization in return for 
their contributions. While this is only a small step in the larger 
journey of reforming America's Tax Code, it furthers the important 
objective of charitable giving by ensuring that taxpayers receive the 
proper tax treatment for their gifts.
  Mr. President, the time has come to provide meaningful tax relief and 
reform for the American people. The Republican-led Congress has taken 
important and meaningful steps in that direction over the past two 
years with the Taxpayer Relief Act of 1997 and the Internal Revenue 
Service Reform Act of 1998. We must continue this important endeavor by 
continuing to restructure our tax policy to respect marriage and 
families, encourage investment and savings, reward charitable giving, 
and promote job creation and entrepreneurship. I urge my colleagues to 
join me in this endeavor.
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