Volunteer Mileage Reimbursement and Deduction
As the price for gasoline hits record highs, volunteers have cut back on their use of vehicles for charitable purposes - hurting the people they intend to serve and making it difficult for charities to recruit and retain volunteers. The impact of high gas prices on volunteerism is being exacerbated by two problems in current tax policy: 1) individuals must treat as income any mileage reimbursements by the charities in excess of 14 cents per mile, and 2) the rate at which volunteers may deduct the mileage they drive on behalf of a charity is fixed at only 14 cents per mile. Congress should take action to exempt reimbursement of mileage from income and raise the volunteer standard deduction to a reasonable rate.

Update!
Independent Sector submitted two letters November 3, 2008 to the leadership of both the Senate and the House of Representatives urging the inclusion of S.3532, the Giving Incentives for Volunteers Everywhere Act of 2008 (GIVE Act) and H.R.6854, the Fair Deal for Volunteers Act of 2008 in any stimulus legislation considered by Congress.

• IS letter to the Senate Leadership
• IS letter to the House Leadership

Current Status
As part of the Emergency Economic Stabilization Act of 2008 (H.R.1424), the House of Representative voted October 3rd to put in place the temporary charitable giving incentives and volunteer mileage assistance initially proposed as part of the Midwestern Disaster Tax Relief Act. The Senate passed identical language earlier in the week and President Bush signed the bill shortly after passage.

On September 10, Representatives John Lewis (D-GA) and Jim Ramstad (R-MN) introduced H.R.6854, the Fair Deal for Volunteers Act of 2008 to address the impact of high gas prices on charitable volunteers. On September 22 Senators Benjamin Cardin (D-MD), Olympia Snowe (R-ME), Chuck Schumer (D-NY), and John Ensign (R-NV) introduced its' companion bill, S.3532, which is entitled the Giving Incentives for Volunteers Everywhere (GIVE) Act of 2008. This legislation would do three things:

1. Exempt from a volunteer’s taxable income any reimbursement by a charity for mileage up to the business rate (GIVE Act provision);
2. Give the Treasury Department authority to change the volunteer mileage deduction rate, which has been fixed in statute at 14 cents per mile since 1997; and 
3. Raise the volunteer mileage deduction immediately to 27 cents per mile and ensure it doesn’t fall below the rate for medical mileage expenses in the future (currently 27 cents per mile). 

Take Action
We also encourage IS members to contact their Senators and Representatives to urge Congress to exclude reimbursements from income and to raise the volunteer mileage rate. Here are three additional things you can do to make a difference:

1. Send a Letter to your Senators and Representatives
   Policymakers need to know that people back home really do care about issues, and a thoughtful letter with real life experiences is still one of the most effective ways of communicating with them. Click here for a sample letter that can be tailored to fit your organization. Please share with us any response you get.
2. Talk to your Senators and Representatives
   A telephone call or in-person discussion with policymakers or their staff can help demonstrate the impact of gas prices on the work of volunteers and make clear the urgency on fixing the current tax law disincentives. Here are talking points you can use to bring the point home. Let us know what they have to say by dropping us an email at publicpolicy@independentsector.org.
3. Send us your stories on the impact of gas prices on volunteers
   Help us demonstrate how the high prices of gas adversely are affecting your ability to attraction and retain volunteers by emailing us at publicpolicy@independentsector.org.

Background

• Taxing Reimbursements: Current law allows charities to reimburse volunteers, on a nontaxable basis only, up to the charitable mileage rate of 14 cents per mile. Alternatively, volunteers are permitted to deduct their “out of pocket” expenses incurred in providing donated services — when those expenses are not reimbursed.
• Volunteer Mileage Rate: Congress first set at 12 cents per mile the statutory deduction rate for volunteers who use their vehicles for charitable purposes as part of the Deficit Reduction Act of 1984 (P.L. 98-369). The rate was slightly raised to 14 cents per mile under a provision contained in the Taxpayer Relief Act of 1997 (P.L. 105-34) .
• Temporary Increase in 2005-2006: The charitable mileage rate was raised temporarily in 2005 and 2006 to 70 percent of the standard business mileage rate as part of the Katrina Emergency Tax Relief Act of 2005 (P.L.109-73). The law also provided that mileage reimbursements up to the business rate to charitable volunteers could be exempted from income when service was related to hurricane relief. The Joint Committee on Taxation (JCT) calculated the “cost” of these provisions at $31 million.
• Business and Moving/Medical Rate: The IRS recently increased the standard mileage rate used to calculate the deductible cost of operating an automobile for business purposes to 58.5 cents per mile and 27 cents per mile for moving and medical purposes for the remaining six months of 2008. Unlike the business and moving/medical rates which are variable and set by the IRS, the charitable rate is fixed by statute at 14 cents per mile under §170(i) of the Internal Revenue Code. 

Last Updated: November 3, 2008