II 

110TH CONGRESS 

1ST SESSION S. 1568 

To amend the Internal Revenue Code of 1986 to encourage private 

philanthropy. 

IN THE SENATE OF THE UNITED STATES 

JUNE 7, 2007 

Mr. ISAKSON (for himself and Mr. CHAMBLISS) 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 encourage 

private philanthropy. 

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 ‘‘Personal Philanthropy 

5 Account Act of 2007’’. 

6 SEC. 2. PERSONAL PHILANTHROPY ACCOUNTS. 

7 (a) IN GENERAL.—Part VII of subchapter B of chap8 ter 1 of the Internal Revenue Code of 1986 (relating to 

9 additional itemized deductions for individuals) is amended 


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1 by redesignating section 224 as section 225 and by insert2 ing after section 223 the following new section: 

3 ‘‘SEC. 224. PERSONAL PHILANTHROPY ACCOUNTS. 

4 ‘‘(a) ALLOWANCE OF DEDUCTION.— 

5 ‘‘(1) IN GENERAL.—In the case of an indi6 vidual, there shall be allowed as a deduction for the 

7 taxable year an amount equal to the aggregate 

8 amount paid in cash during such taxable year (and 

9 not described in subsection (d)(2)(A)(ii)) by or on 

10 behalf of such individual to a personal philanthropy 

11 account of such individual. 

12 ‘‘(2) COORDINATION WITH CHARITABLE CON13 TRIBUTIONS.— 

14 ‘‘(A) IN GENERAL.—With respect to any 

15 amount allowable as a deduction under para16 graph (1)— 

17 ‘‘(i) no other deduction shall be al18 lowed under any other provision of this 

19 title, and 

20 ‘‘(ii) such amount shall be considered 

21 a charitable contribution for purposes of 

22 section 170(b)(1). 

23 ‘‘(B) EMPLOYER CONTRIBUTIONS.—With 

24 respect to any amount contributed by an em25 ployer on behalf of the account holder— 


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1 ‘‘(i) except as provided in clause (ii), 

2 such amount shall be considered a chari3 table contribution for purposes of section 

4 170(b)(2), and 

5 ‘‘(ii) if the employer provides such 

6 amount pursuant to a program under 

7 which the employer matches employee con8 tributions at least dollar-for-dollar on con9 tributions up to 5 percent of all employees’ 

10 compensation— 

11 ‘‘(I) clause (i) shall not apply 

12 with respect to such amount, and 

13 ‘‘(II) such amount shall not be 

14 taken into account under subsection 

15 (b)(1). 

16 ‘‘(b) PERSONAL PHILANTHROPY ACCOUNT.—For 

17 purposes of this section, the term ‘personal philanthropy 

18 account’ means a trust created or organized in the United 

19 States exclusively for the purpose of making distributions 

20 for the charitable purposes designated by an individual 

21 who is the account holder of the trust (and designated as 

22 a personal philanthropy account at the time created or or23 ganized), but only if the written governing instrument cre24 ating the trust meets the following requirements: 


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1 ‘‘(1) Except in the case of a rollover contribu2 tion described in subsection (d)(3), no contribution 

3 will be accepted unless it is in cash, and contribu4 tions will not be accepted for the taxable year on be5 half of any individual in excess of $15,000. 

6 ‘‘(2) The trustee is a bank (as defined in sec7 tion 408(n)) or such other person who demonstrates 

8 to the satisfaction of the Secretary that the manner 

9 in which that person will administer the trust will be 

10 consistent with the requirements of this section or 

11 who has so demonstrated with respect to any per12 sonal philanthropy account and who is not disquali13 fied under subsection (f). 

14 ‘‘(3) No part of the trust assets will be invested 

15 in life insurance contracts. 

16 ‘‘(4) The assets of the trust shall not be com17 mingled with other property except in a common 

18 trust fund or common investment fund. 

19 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur20 poses of this section— 

21 ‘‘(1) DEFAULT DISTRIBUTION RULES.— 

22 ‘‘(A) IN GENERAL.—No account shall be 

23 treated as a personal philanthropy account un24 less at all times there are in effect qualified deVerDate Aug 31 2005 22:47 Jun 08, 2007 Jkt 059196 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1568.IS S1568

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1 fault charitable organization designations under 

2 subparagraphs (B) and (C). 

3 ‘‘(B) QUALIFIED DEFAULT CHARITABLE

4 ORGANIZATION DESIGNATION.—For purposes of 

5 subparagraph (A), a qualified default charitable 

6 organization designation in effect under this 

7 subparagraph is the designation by the account 

8 holder of an organization to which the remain9 der of such account may be made in the form 

10 of a qualified philanthropy payment upon the 

11 death of the account holder in any case in 

12 which the account holder fails to provide by will 

13 or other suitable estate document for the dis14 tribution of the assets of such account. 

15 ‘‘(C) TRUSTEE DESIGNATION.—For pur16 poses of subparagraph (A), a qualified default 

17 charitable organization designation in effect 

18 under this subparagraph is the designation by 

19 the trustee of the personal philanthropy account 

20 of an organization to which a payment under 

21 subparagraph (B) will be made if the organiza22 tion designated under subparagraph (B) is not 

23 qualified to receive a qualified philanthropy 

24 payment at the time of such payment. 

25 ‘‘(2) MINIMUM DISTRIBUTION REQUIREMENT.— 


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1 ‘‘(A) IN GENERAL.—No account shall be 

2 treated as a personal philanthropy account for 

3 a taxable year unless such account meets the 

4 minimum distribution requirements for such 

5 taxable year. 

6 ‘‘(B) MINIMUM DISTRIBUTION REQUIRE7 MENT.—An account meets the minimum dis8 tribution requirement for a taxable year if the 

9 aggregate distributions from the account for the 

10 taxable year are not less than 5 percent of the 

11 balance of such account as of the last day of 

12 the preceding taxable year. 

13 ‘‘(C) EXCEPTION FOR ACCOUNTS WITH A

14 BALANCE OF LESS THAN $10,000.—Subpara15 graph (A) shall not apply to any account for a 

16 taxable year if the balance of such account as 

17 of the last day of the preceding taxable year is 

18 less than $10,000. 

19 ‘‘(3) DENIAL OF DEDUCTION TO DEPEND20 ENTS.—No deduction shall be allowed under this 

21 section to any individual with respect to whom a de22 duction under section 151 is allowable to another 

23 taxpayer for a taxable year beginning in the cal24 endar year in which such individual’s taxable year 

25 begins. 


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1 ‘‘(4) INFLATION ADJUSTMENT.—In the case of 

2 any taxable year beginning in a calendar year after 

3 2009, the dollar amount contained in subsection 

4 (b)(1) shall be increased by an amount equal to— 

5 ‘‘(A) such dollar amount, multiplied by 

6 ‘‘(B) the cost-of-living adjustment deter7 mined under section 1(f)(3) for the calendar 

8 year in which the taxable year begins, deter9 mined by substituting ‘calendar year 2008’ for 

10 ‘calendar year 1992’ in subparagraph (B) 

11 thereof. 

12 Any increase determined under the preceding sen13 tence shall be rounded to the nearest multiple of 

14 $50. 

15 ‘‘(d) TAX TREATMENT OF DISTRIBUTIONS.— 

16 ‘‘(1) IN GENERAL.—Any distribution from a 

17 personal philanthropy account shall be includible in 

18 the gross income of the account holder in the man19 ner as provided in section 72. 

20 ‘‘(2) QUALIFIED PHILANTHROPY PAYMENTS OR

21 IMMEDIATE RETURN OF CONTRIBUTIONS.— 

22 ‘‘(A) IN GENERAL.—No amount shall be 

23 includible in gross income under paragraph (1) 

24 to the extent that such distribution— 


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1 ‘‘(i) is a qualified philanthropy pay2 ment, or 

3 ‘‘(ii) is equal to the amount of con4 tributions made within 30 days before the 

5 date of such distribution. 

6 ‘‘(B) QUALIFIED PHILANTHROPY PAYMENT

7 DEFINED.—For purposes of this section, the 

8 term ‘qualified philanthropy payment’ means a 

9 distribution from a personal philanthropy ac10 count— 

11 ‘‘(i) which is made, pursuant to a re12 quest by the account holder, by the trustee 

13 of the account within 30 days after receipt 

14 by the trustee of a certification under sub15 paragraph (C), and 

16 ‘‘(ii) which is paid for a purpose speci17 fied in section 170(c). 

18 A trustee who fails to meet the 30-day require19 ment of clause (i) shall be subject to disquali20 fication as a trustee. 

21 ‘‘(C) ORGANIZATION CERTIFICATION.—For 

22 purposes of subparagraph (B)(i), a certification 

23 under this subparagraph is a certification by an 

24 organization pursuant to a written request by 

25 the trustee of a personal philanthropy account 


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1 that the organization is an organization 

2 which— 

3 ‘‘(i) is described in section 501(c)(3) 

4 and exempt from tax under section 501(a), 

5 and 

6 ‘‘(ii) is not a personal philanthropy 

7 account. 

8 ‘‘(D) COORDINATION WITH CHARITABLE

9 CONTRIBUTIONS.— 

10 ‘‘(i) No deduction shall be allowed 

11 under sections 170, 642(c), 2055, 

12 2106(a)(2), or 2522 for any amount ex13 cluded from gross income under subpara14 graph (A). 

15 ‘‘(ii) Under regulations, the amount 

16 allowable as a deduction under sections 

17 170, 642(c), 2055, 2106(a)(2), or 2522 (as 

18 appropriate) for the taxable year (without 

19 regard to this clause) shall be reduced by 

20 the amount excluded from gross income for 

21 the taxable year under subparagraph (A). 

22 ‘‘(iii) Section 170(d) shall not apply 

23 to any amount excluded from gross income 

24 under subparagraph (A). 

25 ‘‘(3) ROLLOVER CONTRIBUTIONS.— 


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1 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

2 not apply to any amount paid or distributed 

3 from a personal philanthropy account to the ex4 tent that the amount received is paid, not later 

5 than the 60th day after the date of such pay6 ment or distribution, into another personal phi7 lanthropy account of the same account holder. 

8 The preceding sentence shall not apply to any 

9 payment or distribution if it applied to any 

10 prior payment or distribution during the 12- 

11 month period ending on the date of the pay12 ment or distribution. 

13 ‘‘(B) HEIR.—Paragraph (1) shall not 

14 apply to any amount paid or distributed from 

15 a personal philanthropy account of a decedent 

16 to the extent that the amount received is paid, 

17 not later than the 60th day after the date of 

18 such payment or distribution, into the personal 

19 philanthropy account of an heir of the decedent, 

20 as designated by the will of the decedent. 

21 ‘‘(4) ADDITIONAL TAX FOR DISTRIBUTIONS NOT

22 USED FOR CHARITABLE CONTRIBUTION PUR23 POSES.—The tax imposed by this chapter for any 

24 taxable year on any account holder with respect to 

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1 count which is includible in gross income shall be in2 creased by 100 percent of the amount which is so 

3 includible. 

4 ‘‘(e) TAX TREATMENT OF ACCOUNT.— 

5 ‘‘(1) IN GENERAL.—A personal philanthropy 

6 account shall be exempt from taxation under this 

7 subtitle. Notwithstanding the preceding sentence, 

8 the personal philanthropy account shall be subject to 

9 the taxes imposed by section 511 (relating to imposi10 tion of tax on unrelated business income of chari11 table organizations). 

12 ‘‘(2) ACCOUNT TERMINATIONS.—Rules similar 

13 to the rules of paragraphs (2) and (4) of section 

14 408(e) shall apply to any personal philanthropy ac15 count. 

16 ‘‘(f) DISQUALIFICATION OF TRUSTEE.—The trustee 

17 of a personal philanthropy account shall not be qualified 

18 to be a trustee of such account after a final determination 

19 by the Secretary that the trustee has disbursed more than 

20 10 percent of its payments from personal philanthropy ac21 counts to non-qualifying organizations in a calendar year. 

22 ‘‘(g) FEES.—The Commissioner of the Securities and 

23 Exchange Commission (or the Commissioner’s designee) 

24 shall certify that fees charged by any trustee or asset man25 ager of a personal philanthropy account are fair and reaVerDate Aug 31 2005 22:47 Jun 08, 2007 Jkt 059196 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1568.IS S1568

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1 sonable. The failure to so certify shall result in the dis2 qualification of such person as a trustee or asset manager 

3 of personal philanthropy accounts. 

4 ‘‘(h) REPORTS.—The trustee of a personal philan5 thropy account shall make such reports regarding such ac6 count to the Secretary and to the holder of the account 

7 with respect to contributions, distributions, and such other 

8 matters as the Secretary may require. The reports re9 quired by this subsection shall be filed at such time and 

10 in such manner and furnished to such individuals at such 

11 time and in such manner as may be required.’’. 

12 (b) DEDUCTION ALLOWED WHETHER OR NOT INDI13 VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 

14 of section 62 of such Code is amended by inserting before 

15 the flush sentence at the end the following new paragraph: 

16 ‘‘(22) PERSONAL PHILANTHROPY ACCOUNTS.— 

17 The deduction allowed under section 224.’’. 

18 (c) EXCLUSION FOR EMPLOYER CONTRIBUTIONS TO

19 PERSONAL PHILANTHROPY ACCOUNTS.— 

20 (1) IN GENERAL.—Part III of subchapter B of 

21 chapter 1 of such Code is amended by inserting 

22 after section 139A the following new section: 


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1 ‘‘SEC. 139B. CONTRIBUTIONS BY EMPLOYER TO PERSONAL 

2 PHILANTHROPY ACCOUNTS. 

3 ‘‘(a) IN GENERAL.—Gross income of an employee 

4 does not include contributions by the employer to the per5 sonal philanthropy account of the employee. 

6 ‘‘(b) PERSONAL PHILANTHROPY ACCOUNT.—For 

7 purposes of this section, the term ‘personal philanthropy 

8 account’ shall have the meaning given to such term by 

9 section 224. 

10 ‘‘(c) EXCLUSION NOT TO EXCEED COMPENSA11 TION.— 

12 ‘‘(1) EMPLOYEES.—The amount excluded from 

13 gross income by subsection (a) with respect to an 

14 employee shall not exceed such employee’s wages, 

15 salaries, tips, and other employee compensation 

16 which are attributable to such employee’s employ17 ment by the employer referred to in such subsection. 

18 ‘‘(2) SELF-EMPLOYED INDIVIDUALS.—The 

19 amount excluded from gross income by subsection 

20 (a) for contributions with respect to an individual 

21 who is self employed shall not exceed such individ22 ual’s earned income (as defined in section 401(c)(2)) 

23 derived by the taxpayer from the trade or business 

24 with respect to which the individual is self-employed. 

25 ‘‘(3) COMMUNITY PROPERTY LAWS NOT TO

26 APPLY.—The limitations under this subsection shall 


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1 be determined without regard to community prop2 erty laws.’’. 

3 (2) CONFORMING AMENDMENTS.— 

4 (A) Section 3121(a) of such Code is 

5 amended by striking ‘‘or’’ at the end of para6 graph (21), by striking the period at the end of 

7 paragraph (22) and inserting ‘‘; or’’, and by in8 serting after paragraph (22) the following new 

9 paragraph: 

10 ‘‘(23) any payment made to a personal philan11 thropy account (as defined in section 224) of an em12 ployee.’’. 

13 (B) Section 3231(e) of such Code is 

14 amended by adding at the end the following 

15 new paragraph: 

16 ‘‘(13) PERSONAL PHILANTHROPY ACCOUNT

17 CONTRIBUTIONS.—The term ‘compensation’ shall 

18 not include any payment made to a personal philan19 thropy account (as defined in section 224) of an em20 ployee.’’. 

21 (C) Section 3306(b) of such Code is 

22 amended by striking ‘‘or’’ at the end of para23 graph (18), by striking the period at the end of 

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1 serting after paragraph (19) the following new 

2 paragraph: 

3 ‘‘(20) any payment made to a personal philan4 thropy account (as defined in section 224) of an em5 ployee.’’. 

6 (D) Section 3401(a) of such Code is 

7 amended by striking ‘‘or’’ at the end of para8 graph (21), by striking the period at the end of 

9 paragraph (22) and inserting ‘‘; or’’, and by in10 serting after paragraph (22) the following new 

11 paragraph: 

12 ‘‘(23) any payment made to a personal philan13 thropy account (as defined in section 224) of an em14 ployee.’’. 

15 (E) Section 6051(a) of such Code is 

16 amended by striking ‘‘and’’ at the end of para17 graph (12), by striking the period at the end of 

18 paragraph (13) and inserting ‘‘, and’’, and by 

19 inserting after paragraph (13) the following 

20 new paragraph: 

21 ‘‘(14) the amount contributed to any personal 

22 philanthropy account (as defined in section 224) of 

23 such employee or such employee’s spouse.’’. 

24 (d) PROHIBITED TRANSACTIONS.— 


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1 (1) EXCEPTION FOR TAXABLE DISTRIBUTIONS

2 FROM PERSONAL PHILANTHROPY ACCOUNTS.—Sub3 section (c) of section 4975 of such Code (defining to 

4 prohibited transaction) is amended by adding at the 

5 end the following new paragraph: 

6 ‘‘(7) SPECIAL RULE FOR PERSONAL PHILAN7 THROPY ACCOUNTS.—An individual for whose ben8 efit a personal philanthropy account is established 

9 and any contributor to such account shall be exempt 

10 from the tax imposed by this section with respect to 

11 any transaction concerning such account (which 

12 would otherwise be taxable under this section) if sec13 tion 224(d) applies with respect to such trans14 action.’’. 

15 (2) PLAN DEFINED.—Paragraph (1) of section 

16 4975(e) of such Code is amended by striking ‘‘or’’ 

17 at the end of subparagraph (F), by striking the pe18 riod at the end of subparagraph (G) and inserting 

19 ‘‘, or’’, and by inserting after subparagraph (G) the 

20 following new subparagraph: 

21 ‘‘(H) a personal philanthropy account de22 scribed in section 224.’’. 

23 (e) PENALTY ON FAILURE TO REPORT.—Paragraph 

24 (2) of section 6693(a) of such Code (relating to provisions) 

25 is amended by striking ‘‘and’’ at the end of subparagraph 


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1 (D), by striking the period at the end of subparagraph 

2 (E) and inserting ‘‘, and’’, and by inserting after subpara3 graph (E) the following new subparagraph: 

4 ‘‘(F) section 224(f) (relating to personal 

5 philanthropy accounts).’’. 

6 (f) CONFORMING AMENDMENT.—Paragraph (2) of 

7 section 26(b) of such Code is amended by striking ‘‘and’’ 

8 at the end of subparagraph (S), by striking the period at 

9 the end of subparagraph (T) and inserting ‘‘, and’’, and 

10 by adding at the end the following new subparagraph: 

11 ‘‘(U) section 224(d)(4) (relating to addi12 tional tax with respect to distributions not used 

13 for charitable contribution purposes).’’. 

14 (g) CLERICAL AMENDMENTS.— 

15 (1) The table of sections for part VII of sub16 chapter B of chapter 1 of such Code is amended by 

17 redesignating the item relating to section 224 as an 

18 item relating to section 225 and by inserting after 

19 the item relating to section 223 the following new 

20 item: 

‘‘Sec. 224. Personal philanthropy accounts.’’. 

21 (2) The table of sections for part III of sub22 chapter B of chapter 1 of such Code is amended by 

23 inserting after the item relating to section 139A the 

24 following new item: 

‘‘Sec. 139B. Contributions by employer to personal philanthropy accounts.’’. 


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1 (h) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2007. 

Æ 


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