II

104TH CONGRESS

1ST SESSION S. 893

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

charitable contributions, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 7 (legislative day, JUNE 5), 1995

Mr. SANTORUM 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 provide

a credit for charitable contributions, 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. CREDIT FOR CHARITABLE CONTRIBUTIONS TO

4 CERTAIN PRIVATE CHARITIES PROVIDING

5 ASSISTANCE TO THE POOR.

6 (a) IN GENERAL.—Subpart A of part IV of sub7 chapter A of chapter 1 of the Internal Revenue Code of

8 1986 (relating to nonrefundable personal credits) is

9 amended by inserting after section 22 the following new

10 section:
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1 ‘‘SEC. 23. CREDIT FOR CERTAIN CHARITABLE CONTRIBU2 TIONS.

3 ‘‘(a) IN GENERAL.—In the case of an individual,

4 there shall be allowed as a credit against the tax imposed

5 by this chapter for the taxable year an amount equal to

6 the qualified charitable contributions which are paid by

7 the taxpayer during the taxable year.

8 ‘‘(b) LIMITATION.—The credit allowed by subsection

9 (a) for the taxable year shall not exceed $100 ($200 in

10 the case of a joint return).

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

12 purposes of this section, the term ‘qualified charitable con13 tribution’ means any charitable contribution (as defined

14 in section 170(c)) made in cash to a qualified charity but

15 only if the amount of each such contribution, and the re16 cipient thereof, are identified on the return for the taxable

17 year during which such contribution is made.

18 ‘‘(d) QUALIFIED CHARITY.—

19 ‘‘(1) IN GENERAL.—For purposes of this sec20 tion, the term ‘qualified charity’ means, with respect

21 to the taxpayer, any organization described in sec22 tion 501(c)(3) and exempt from tax under section

23 501(a)—

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

25 meeting the requirements of paragraphs (2)

26 and (3),
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1 ‘‘(B) which is organized under the laws of

2 the United States or of any State in which the

3 organization is qualified to operate, and

4 ‘‘(C) which is required, or elects to be

5 treated as being required, to file returns under

6 section 6033.

7 ‘‘(2) CHARITY MUST PRIMARILY ASSIST THE

8 POOR.—An organization meets the requirements of

9 this paragraph only if the predominant activity of

10 such organization is the provision of services to indi11 viduals whose annual incomes generally do not ex12 ceed 150 percent of the official poverty line (as de13 fined by the Office of Management and Budget).

14 ‘‘(3) MINIMUM EXPENDITURE REQUIREMENT.—

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

16 the requirements of this paragraph only if the

17 Secretary reasonably expects that the annual

18 exempt purpose expenditures of such organiza19 tion will not be less than 70 percent of the an20 nual aggregate expenditures of such organiza21 tion.

22 ‘‘(B) EXEMPT PURPOSE EXPENDITURE.—

23 For purposes of subparagraph (A)—

24 ‘‘(i) IN GENERAL.—The term ‘exempt

25 purpose expenditure’ means any expendi-
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1 ture to carry out the activity referred to in

2 paragraph (2).

3 ‘‘(ii) EXCEPTIONS.—Such term shall

4 not include—

5 ‘‘(I) any administrative expense,

6 ‘‘(II) any expense for the purpose

7 of influencing legislation (as defined

8 in section 4911(d)),

9 ‘‘(III) any expense primarily for

10 the purpose of fundraising, and

11 ‘‘(IV) any expense for litigation

12 on behalf of any individual referred to

13 in paragraph (2).

14 ‘‘(e) TIME WHEN CONTRIBUTIONS DEEMED

15 MADE.—For purposes of this section, at the election of

16 the taxpayer, a contribution which is made not later than

17 the time prescribed by law for filing the return for the

18 taxable year (not including extensions thereof) shall be

19 treated as made on the last day of such taxable year.

20 ‘‘(f) COORDINATION WITH DEDUCTION FOR CHARI21 TABLE CONTRIBUTIONS.—

22 ‘‘(1) CREDIT IN LIEU OF DEDUCTION.—The

23 credit provided by subsection (a) for any qualified

24 charitable contribution shall be in lieu of any deduc-
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1 tion otherwise allowable under this chapter for such

2 contribution.

3 ‘‘(2) ELECTION TO HAVE SECTION NOT

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

5 to have this section not apply.’’

6 (b) QUALIFIED CHARITIES REQUIRED TO PROVIDE

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

8 6104 of such Code (relating to public inspection of certain

9 annual returns and applications for exemption) is amend10 ed by adding at the end the following new paragraph:

11 ‘‘(3) CHARITIES RECEIVING CREDITABLE CON12 TRIBUTIONS REQUIRED TO PROVIDE COPIES OF AN13 NUAL RETURN.—

14 ‘‘(A) IN GENERAL.—Every qualified char15 ity (as defined in section 23(d)) shall, upon re16 quest of an individual made at an office where

17 such organization’s annual return filed under

18 section 6033 is required under paragraph (1) to

19 be available for inspection, provide a copy of

20 such return to such individual without charge

21 other than a reasonable fee for any reproduc22 tion and mailing costs. If the request is made

23 in person, such copies shall be provided imme24 diately and, if made other than in person, shall

25 be provided within 30 days.
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1 ‘‘(B) PERIOD OF AVAILABILITY.—Subpara2 graph (A) shall apply only during the 3-year pe3 riod beginning on the filing date (as defined in

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

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

6 for subpart A of part IV of subchapter A of chapter 1

7 of such Code is amended by inserting after the item relat8 ing to section 22 the following new item:

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

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

10 this section shall apply to contributions made after the

11 90th day after the date of the enactment of this Act in

12 taxable years ending after such date.

13 SEC. 2. REPEAL OF CERTAIN CHANGES MADE IN THE

14 EARNED INCOME CREDIT.

15 (a) REPEAL OF CREDIT FOR INDIVIDUALS WITHOUT

16 CHILDREN.—Subparagraph (A) of section 32(c)(1) of the

17 Internal Revenue Code of 1986 (defining eligible individ18 ual) is amended to read as follows:

19 ‘‘(A) IN GENERAL.—The term ‘eligible in20 dividual’ means any individual who has a quali21 fying child for the taxable year.’’

22 (b) REPEAL OF INCREASES IN AMOUNT OF CRED23 IT.—

24 (1) Subsection (b) of section 32 of such Code

25 is amended to read as follows:
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1 ‘‘(b) PERCENTAGES.—

2 ‘‘(1) IN GENERAL.—The credit percentage and

3 the phaseout percentage shall be determined as

4 follows:

‘‘In the case of an eligible individual with:The credit percentage

is:

The phaseout percentage

is:

1 qualifying child .................... 34 ............................. 15.98

2 or more qualifying children .. 36 ............................. 20.22

5 ‘‘(2) AMOUNTS.—The earned income amount

6 and the phaseout amount shall be determined as

7 follows:

‘‘In the case of an eligible individual with:The earned income

amount is: The phaseout amount is:

1 qualifying child .................... $6,000 ...................... $11,000

2 or more qualifying children .. $8,425 ...................... $11,000.’’

8 (2) Paragraph (1) of section 32(i) of such Code

9 is amended by striking ‘‘subsection (b)(2)(A)’’ and

10 inserting ‘‘subsection (b)(2)’’.

11 (c) EFFECTIVE DATE.—The amendments made by

12 this section shall apply to taxable years beginning after

13 December 31, 1995, except that adjustments shall be

14 made under section 32(i) of the Internal Revenue Code

15 of 1986 to the section 32(b)(2) of such Code (as amended

16 by this section) for such taxable years.

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