Bill Would Give Break for Volunteers’ Car Use

A bill pending in Congress would help people who use their cars as part of their volunteer work for charities.

Under current federal law, volunteers may deduct 14 cents a mile for their automobile costs, or be reimbursed by a charity at that rate without the payment being subject to income tax. The rate for the business use of a car is a much-higher 31 cents a mile.

Sen. Frank H. Murkowski, an Alaska Republican, said he has heard that the I.R.S. has been trying to collect tax on reimbursements by charities that exceed the 14-cent limit.

“I understand that there have been cases where volunteer drivers have been audited and subjected to back taxes, penalties, and interest because of unreported volunteer mileage reimbursements, even though their reimbursements didn’t exceed the business rate,” said Mr. Murkowski. “Does the I.R.S. have nothing better to do than audit such individuals?”

Mr. Murkowski has introduced a bill, S 1208, that would exclude from tax any reimbursements by charities that exceed the 14-cent rate, as long as the payments do not exceed the business rate and records are kept. The bill would not increase the standard deduction for volunteers who are not reimbursed by a charity.

Said Mr. Murkowski: “Our goal should be to encourage Americans to volunteer their time to help others. They should not be penalized for doing so.”