II

104TH CONGRESS

1ST SESSION S. 846

To amend the Internal Revenue Code of 1986 to allow a tax credit for

charitable contributions to certain private charities providing assistance

to the poor thereby improving Federal welfare efforts through increased

charitable activity, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 23 (legislative day, MAY 15), 1995

Mr. ASHCROFT (for himself, Mr. COVERDELL, Mr. CRAIG, Mr. DEWINE, Mr.

SMITH, Mr. INHOFE, and Mr. KEMPTHORNE) introduced the following

bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to allow a

tax credit for charitable contributions to certain private

charities providing assistance to the poor thereby improving Federal welfare efforts through increased charitable

activity, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Charitable Volunteers

5 Tax Credit Incentive Act of 1995’’.
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1 SEC. 2. CREDIT FOR CHARITABLE CONTRIBUTIONS TO CER2 TAIN PRIVATE CHARITIES PROVIDING AS3 SISTANCE TO THE POOR.

4 (a) IN GENERAL.—Subpart A of part IV of sub5 chapter A of chapter 1 of the Internal Revenue Code of

6 1986 (relating to nonrefundable personal credits) is

7 amended by inserting after section 22 the following new

8 section:

9 ‘‘SEC. 23. CREDIT FOR CERTAIN CHARITABLE CONTRIBU10 TIONS.

11 ‘‘(a) IN GENERAL.—In the case of an eligible tax12 payer, there shall be allowed as a credit against the tax

13 imposed by this chapter for the taxable year an amount

14 equal to so much of the qualified charitable contributions

15 which are paid by the taxpayer to 1 qualified charity as

16 do not exceed $500.

17 ‘‘(b) ELIGIBLE TAXPAYER.—For purposes of this

18 section, the term ‘eligible taxpayer’ means any individual

19 who has worked at least 50 hours at the qualified charity

20 identified under subsection (c) during the taxable year.

21 ‘‘(c) QUALIFIED CHARITABLE CONTRIBUTION.—For

22 the purposes of this section, the term ‘qualified charitable

23 contribution’ means any charitable contribution (as de24 fined in section 170(c)) made in cash, but only if the

25 amount of such contribution, the qualified charity, and the

26 number of hours worked by the taxpayer at the qualified
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1 charity are identified on the return for the taxable year

2 during which such contribution is made.

3 ‘‘(d) QUALIFIED CHARITY.—

4 ‘‘(1) IN GENERAL.—For purposes of this sec5 tion, the term ‘qualified charity’ means, with respect

6 to the taxpayer, any organization described in sec7 tion 501(c)(3) and exempt from tax under section

8 501(a)—

9 ‘‘(A) which is certified by the Secretary as

10 meeting the requirements of paragraphs (2)

11 and (3); and

12 ‘‘(B) which is organized under the laws of

13 a State at the time the contribution is made

14 and is exempt from income taxation (if any) by

15 such State.

16 ‘‘(2) CHARITY MUST PRIMARILY ASSIST THE

17 POOR.—An organization meets the requirements of

18 this paragraph only if the predominant activity of

19 such organization is the provision of services to indi20 viduals whose annual incomes do not exceed 150

21 percent of the official poverty line (as defined by the

22 Office of Management and Budget).

23 ‘‘(3) MINIMUM EXPENDITURE REQUIREMENT.—

24 ‘‘(A) IN GENERAL.—An organization meets

25 the requirements of this paragraph only if the
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1 Secretary reasonably expects that the annual

2 exempt purpose expenditures of such organiza3 tion will not be less than 70 percent of the an4 nual aggregate expenditures of such organiza5 tion.

6 ‘‘(B) EXEMPT PURPOSE EXPENDITURE.—

7 For purposes of subparagraph A—

8 ‘‘(i) IN GENERAL.—The term ‘exempt

9 purpose expenditure’ means any expendi10 ture to carry out the activity referred to in

11 paragraph (2).

12 ‘‘(ii) EXCEPTIONS.—Such term shall

13 not include—

14 ‘‘(I) any administrative expense;

15 ‘‘(II) any expenses for the pur16 pose of influencing legislation (as de17 fined in section 4911(d));

18 ‘‘(III) any expense primarily for

19 the purpose of fundraising; and

20 ‘‘(IV) any expense for a legal

21 service provided on behalf of any indi22 vidual referred to in paragraph (2).

23 ‘‘(e) DONOR MAY NOT HAVE FINANCIAL INTEREST

24 IN CHARITY.—
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1 ‘‘(1) IN GENERAL.—No credit shall be allowed

2 under this section for any contribution made to an

3 organization if the donor or any member of the do4 nor’s family is an officer or employee of such organi5 zation.

6 ‘‘(2) SELF-DEALING.—To the extent provided

7 by the Secretary by regulation, no credit shall be al8 lowed under this section for any contribution made

9 to an organization if—

10 ‘‘(A) the donor,

11 ‘‘(B) any member of the family of the

12 donor, or

13 ‘‘(C) any thirty-five percent controlled en14 tity of persons described in subparagraph (A)

15 or (B), engages in significant activities with re16 spect to such organization which are a type de17 scribed in section 4941(d) (relating to self-deal18 ing).

19 ‘‘(3) 35-PERCENT CONTROLLED ENTITY.—

20 ‘‘(A) IN GENERAL.—For purposes of para21 graph (2), the term ‘35-percent controlled en22 tity’ means—

23 ‘‘(i) a corporation in which persons

24 described in subparagraph (A) or (B) of
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1 paragraph (2) own more than 35 percent

2 of the combined voting power,

3 ‘‘(ii) a partnership in which such per4 sons own more than 35 percent of the

5 profits interest, and

6 ‘‘(iii) a trust or estate in which such

7 persons own more than 35 percent of the

8 beneficial interest.

9 ‘‘(B) CONSTRUCTIVE OWNERSHIP

10 RULES.—Rules similar to the rules of para11 graphs (3) and (4) of section 4946(a) shall

12 apply for purposes of this paragraph.

13 ‘‘(4) MEMBER OF THE FAMILY.—For the pur14 poses of this subsection, the members of an individ15 ual’s family shall be determined under section

16 4946(d).

17 ‘‘(f) COORDINATION WITH DEDUCTION FOR CHARI18 TABLE CONTRIBUTIONS.—

19 ‘‘(1) CREDIT IN LIEU OF DEDUCTIONS.—The

20 credit provided by subsection (a) for any qualified

21 charitable deduction shall be in lieu of any deduction

22 otherwise allowable under this chapter for such con23 tribution.
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1 ‘‘(2) ELECTION TO HAVE THIS SECTION NOT

2 APPLY.—A taxpayer may elect for any taxable year

3 to have this section not apply.’’.

4 (b) QUALIFIED CHARITIES REQUIRED TO PROVIDE

5 COPIES OF ANNUAL RETURN.—Subsection (e) of section

6 6104 of such code (relating to public inspection of certain

7 annual returns and applications for exemption) is amend8 ed by adding at the end the following new paragraph:

9 ‘‘(3) CHARITIES RECEIVING CREDITABLE CON10 TRIBUTIONS REQUIRED TO PROVIDE COPIES OF AN11 NUAL RETURN.—

12 ‘‘(A) IN GENERAL.—Every qualified char13 ity (as defined in section 23(d)) shall, upon re14 quest of an individual made at an office where

15 such organization’s annual return filed under

16 section 6033 is required under paragraph (1) to

17 be available for inspection, shall provide a copy

18 of such return to such individual without charge

19 other than a reasonable fee for any reproduc20 tion and mailing costs. If the request is made

21 in person, such copies shall be provided imme22 diately and, if made other than in person, shall

23 be provided within 30 days.

24 ‘‘(B) PERIOD OF AVAILABILITY.—Subpara25 graph (A) shall only apply during the 3-year pe-
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1 riod beginning on the filing date (as defined in

2 paragraph (1)(D) of the return requested).’’.

3 (c) CLERICAL AMENDMENT.—The table of sections

4 for subpart A of part IV of subchapter A of chapter of

5 such Code is amended by inserting after the item relating

6 to section 22 the following new item:

‘‘Sec. 23. Credit for certain charitable contributions.’’.

7 (d) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to contributions made and work

9 performed after the 90th day after the date of the enact10 ment of this Act, in taxable years ending after such date.

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