Rep. Tom Petri (R-Wis.) said in an opinion piece for the Aug. 11 edition of The Chronicle of Philanthropy that the federal tax code should be changed to encourage volunteerism.
Petri introduced the Charitable Driving Tax Relief Act, a bill that would offer America’s volunteers the same tax treatment as drivers reimbursed for using personal cars or trucks for work.
Petri cited an example of charity workers using their own vehicles to deliver food or provide shuttle service for the ailing or the elderly. These workers often receive some reimbursement for the mileage and use of the car, but if they receive anything more than 14 cents a mile, that additional money is considered income and taxed with their wages and salaries. Petri said drivers who are reimbursed by an employer should be reimbursed for the full federal amount of 56.5 cents a mile without incurring any additional tax liability.
“Such treatment discourages volunteers from driving,” Petri said. “It’s a double standard that doesn’t make sense and isn’t fair. And it can have a real effect on the amount of time and money volunteers are willing to offer. As far as I can tell, this distinction is unintended, but that should only increase the urgency of correcting a terrible mistake.”
Petri said that most Americans donate their time and money out of altruism, but current federal tax laws send the message that such altruistic behavior is less valuable than similar on-the-job activities. While volunteering is a private activity in which people spend their free time supporting causes they believe in, such activity is not totally isolated from the impact of government, and the tax code could potentially have an adverse effect on the better instincts of the American people.
“It’s time to end the disparity, so I hope nonprofits will urge their members of Congress to join me in supporting the Charitable Driving Tax Relief Act,” Petri said. “The bill would help charities in a significant way: it would drop the requirement that charitable groups report these reimbursements to the IRS, removing an administrative and paperwork burden that often distracts them from carrying out their missions.”