[Congressional Record Volume 151, Number 12 (Tuesday, February 8, 2005)]
[Senate]
[Pages S1129-S1130]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD:
  S. 315. A bill to amend the Internal Revenue Code of 1986 to provide 
that reimbursements for costs of using passenger automobiles for 
charitable and other organizations are excluded from gross income, and 
for other purposes; to the Committee on Finance.
  Mr. FEINGOLD. Mr. President, I am pleased to reintroduce legislation 
today that would increase the mileage reimbursement rate for 
volunteers.
  Under current law, when volunteers use their cars for charitable 
purposes, the volunteers may be reimbursed up to 14 cents per mile for 
their donated services without triggering a tax consequence for either 
the organization or the volunteers. If the charitable organization 
reimburses any more than that, they are required to file an information 
return indicating the amount, and the volunteers must include the 
amount over 14 cents per mile in their taxable income. By contrast, the 
mileage reimbursement level currently permitted for businesses is 40.5 
cents per mile.
  We are asking volunteers and volunteer organizations to bear a 
greater burden of delivering essential services. But the 14 cents per 
mile limit is posing a very real hardship for charitable organizations 
and other nonprofit groups. I have heard from a number of people in 
Wisconsin on the need to increase this reimbursement limit.
  A representative of one organization, the Portage County Department 
on Aging, explained just how important volunteer drivers are to their 
ability to provide services to seniors in that county. The Department 
on Aging reported that dozens of volunteer drivers delivered meals to 
homes and transported people to medical appointments, meal sites, and 
other essential services.
  As many of my colleagues know, the senior meals program is one of the 
most vital services provided under the Older Americans Act, and 
ensuring that meals can be delivered to seniors or that seniors can be 
taken to meal sites is an essential part of that program. 
Unfortunately, Federal support for the senior nutrition programs has 
stagnated in recent years. This has increased pressure on local 
programs to leverage more volunteer services to make up for lagging 
Federal support. The 14 cents per mile reimbursement limit, though, 
increasingly poses a barrier to obtaining those contributions. Portage 
County reports that many of their volunteers cannot afford to offer 
their services under such a restriction. And if volunteers cannot be 
found, their services will have to be replaced by contracting with a 
provider, greatly increasing costs to the Department, costs that come 
directly out of the pot of funds available to pay for meals and other 
services.
  And the same is true for thousands of other non-profit and charitable 
organizations that provide essential services to communities across our 
Nation.
  By contrast, businesses do not face this restrictive mileage 
reimbursement limit. The comparable mileage rate for someone who works 
for a business is currently 40.5  cents per mile. This disparity means 
that a business hired to deliver the same meals delivered by

[[Page S1130]]

volunteers for Portage County may reimburse their employees over double 
the amount permitted the volunteer without a tax consequence.

  This doesn't make sense. The 14 cents per mile volunteer 
reimbursement limit is badly outdated. According to the Congressional 
Research Service, Congress first set a reimbursement rate of 12 cents 
per mile as part of the Deficit Reduction Act of 1984, and did not 
increase it until 1997, when the level was raised slightly, to 14 cents 
per mile, as part of the Taxpayer Relief Act of 1997.
  The bill I am introducing today is identical to a measure I 
introduced in the 107th Congress and the 108th Congress in nearly every 
respect. It raises the limit on volunteer mileage reimbursement to the 
level permitted to businesses. It is essentially the same provision 
passed by the Senate as part of a tax bill in 1999, and it is 
essentially the same provision that passed the Senate as part of the 
CARE Act.
  At the time of the 1999 tax bill, the Joint Committee on Taxation 
(JCT) estimated that the mileage reimbursement provision would result 
in the loss of $1 million over the five-year fiscal period from 1999 to 
2004. The revenue loss was so small that the JCT did not make the 
estimate on a year by year basis.
  Though the revenue loss is small, it is vital that we do everything 
we can to move toward a balanced budget, and to that end I have 
included a provision to fully offset the cost of the measure and make 
it deficit neutral. That provision increases the criminal monetary 
penalties for individuals and corporations convicted of tax fraud. The 
provision passed the Senate in the 108th Congress as part of the JOBS 
bill, but was later dropped in conference and was not included in the 
final version of that bill.
  I urge my colleagues to support this measure. It will help ensure 
charitable organizations can continue to attract the volunteers that 
play such a critical role in helping to deliver services and it will 
simplify the tax code both for nonprofit groups and the volunteers 
themselves.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 315

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS 
                   EXCLUDED FROM GROSS INCOME.

       (a) In General.--Part III of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 is amended by inserting 
     after section 139A the following new section:

     ``SEC. 139B. MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS.

       ``(a) In General.--Gross income of an individual does not 
     include amounts received, from an organization described in 
     section 170(c), as reimbursement of operating expenses with 
     respect to use of a passenger automobile for the benefit of 
     such organization. The preceding sentence shall apply only to 
     the extent that such reimbursement would be deductible under 
     this chapter if section 274(d) were applied--
       ``(1) by using the standard business mileage rate 
     established under such section, and
       ``(2) as if the individual were an employee of an 
     organization not described in section 170(c).
       ``(b) No Double Benefit.--Subsection (a) shall not apply 
     with respect to any expenses if the individual claims a 
     deduction or credit for such expenses under any other 
     provision of this title.
       ``(c) Exemption From Reporting Requirements.--Section 6041 
     shall not apply with respect to reimbursements excluded from 
     income under subsection (a).''.
       (b) Clerical Amendment.--The table of sections for part III 
     of subchapter B of chapter 1 of the Internal Revenue Code of 
     1986 is amended by inserting after the item relating to 
     section 139A and inserting the following new item:

``Sec. 139B. Reimbursement for use of passenger automobile for 
              charity.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 2. INCREASE IN CRIMINAL MONETARY PENALTY LIMITATION FOR 
                   THE UNDERPAYMENT OR OVERPAYMENT OF TAX DUE TO 
                   FRAUD.

       (a) In General.--Section 7206 of the Internal Revenue Code 
     of 1986 (relating to fraud and false statements) is amended--
       (1) by striking ``Any person who--'' and inserting ``(a) In 
     General.--Any person who--'', and
       (2) by adding at the end the following new subsection:
       ``(b) Increase in Monetary Limitation for Underpayment or 
     Overpayment of Tax Due to Fraud.--If any portion of any 
     underpayment (as defined in section 6664(a)) or overpayment 
     (as defined in section 6401(a)) of tax required to be shown 
     on a return is attributable to fraudulent action described in 
     subsection (a), the applicable dollar amount under subsection 
     (a) shall in no event be less than an amount equal to such 
     portion. A rule similar to the rule under section 6663(b) 
     shall apply for purposes of determining the portion so 
     attributable.''.
       (b) Increase in Penalties.--
       (1) Attempt to evade or defeat tax.--Section 7201 of the 
     Internal Revenue Code of 1986 is amended--
       (A) by striking ``$100,000'' and inserting ``$250,000'',
       (B) by striking ``$500,000'' and inserting ``$1,000,000'', 
     and
       (C) by striking ``5 years'' and inserting ``10 years''.
       (2) Willful failure to file return, supply information, or 
     pay tax.--Section 7203 of such Code is amended--
       (A) in the first sentence--
       (i) by striking ``misdemeanor'' and inserting ``felony'', 
     and
       (ii) by striking ``1 year'' and inserting ``10 years'', and
       (B) by striking the third sentence.
       (3) Fraud and false statements.--Section 7206(a) of such 
     Code (as redesignated by subsection (a)) is amended--
       (A) by striking ``$100,000'' and inserting ``$250,000'',
       (B) by striking ``$500,000'' and inserting ``$1,000,000'', 
     and
       (C) by striking ``3 years'' and inserting ``5 years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to underpayments and overpayments attributable to 
     actions occurring after the date of the enactment of this 
     Act.
                                 ______