I 
109TH CONGRESS 
1ST SESSION H. R. 2534 
To amend the Internal Revenue Code of 1986 to encourage private 
philanthropy. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 23, 2005 
Mr. DEAL of Georgia introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to encourage 
private philanthropy. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Personal Philanthropy 
Account Act of 2005’’. 
SEC. 2. PERSONAL PHILANTHROPY ACCOUNTS. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
additional itemized deductions for individuals) is amended
by redesignating section 224 as section 225 and by insert-
ing after section 223 the following new section: 
‘‘SEC. 224. PERSONAL PHILANTHROPY ACCOUNTS. 
‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of an 
individual, there shall be allowed as a deduction for the 
taxable year an amount equal to the aggregate amount 
paid in cash during such taxable year by or on behalf of 
such individual to a personal philanthropy account of such 
individual. 
‘‘(b) PERSONAL
PHILANTHROPY
ACCOUNT.—For 
purposes of this section, the term ‘personal philanthropy 
account’ means a trust created or organized in the United 
States exclusively for the purpose of making distributions 
for the charitable purposes designated by an individual 
who is the account holder of the trust (and designated as 
an personal philanthropy account at the time created or 
organized), but only if the written governing instrument 
creating the trust meets the following requirements: 
‘‘(1) No contribution will be accepted unless it 
is in cash. 
‘‘(2) The trustee is a bank (as defined in sec-
tion 408(n)), community foundation, or another per-
son who demonstrates to the satisfaction of the Sec-
retary that the manner in which that person will ad-
minister the trust will be consistent with the require-
ments of this section or who has so demonstrated 
with respect to any personal philanthropy account 
and who is not disqualified under subsection (f). 
‘‘(3) No part of the trust assets will be invested 
in life insurance contracts. 
‘‘(4) The assets of the trust shall not be com-
mingled with other property except in a common 
trust fund or common investment fund. 
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) DEFAULT DISTRIBUTION RULES.— 
‘‘(A) IN GENERAL.—No account shall be 
treated as a personal philanthropy account un-
less at all times there are in effect qualified de-
fault charitable organization designations under 
subparagraphs (B) and (C). 
‘‘(B) QUALIFIED
DEFAULT
CHARITABLE 
ORGANIZATION DESIGNATION.—For purposes of 
subparagraph (A), a qualified default charitable 
organization designation in effect under this 
subparagraph is the designation by the account 
holder of an organization to which the remain-
der of such account may be made in the form 
of a qualified philanthropy payment upon the 
death of the account holder in any case in
which the account holder fails to provide by will 
or other suitable estate document for the dis-
tribution of the assets of such account. 
‘‘(C) TRUSTEE
DESIGNATION.—For pur-
poses of subparagraph (A), a qualified default 
charitable organization designation in effect 
under this subparagraph is the designation by 
the trustee of the personal philanthropy account 
of an organization to which a payment under 
subparagraph (B) will be made if the organiza-
tion designated under subparagraph (B) is not 
qualified to receive a qualified philanthropy 
payment at the time of such payment. 
‘‘(2) 
MINIMUM
DISTRIBUTION
REQUIRE-
MENTS.— 
‘‘(A) IN GENERAL.—No account shall be 
treated as a personal philanthropy account for 
a taxable year unless such account meets the 
minimum distribution requirements for such 
taxable year. 
‘‘(B) MINIMUM
DISTRIBUTION
REQUIRE-
MENT.—An account meets the minimum dis-
tribution requirements for a taxable year if the 
aggregate distributions from the account for the 
taxable year are not less than 5 percent of the
balance of such account as of the last day of 
the preceding taxable year. 
‘‘(C) EXCEPTION FOR ACCOUNTS WITH A 
BALANCE
OF
LESS
THAN
$10,000.—Subpara-
graph (A) shall not apply to any account for a 
taxable year if the balance of such account as 
of the last day of the preceding taxable year is 
less than $10,000. 
‘‘(3) DENIAL
OF
DEDUCTION
TO
DEPEND-
ENTS.—No deduction shall be allowed under this 
section to any individual with respect to whom a de-
duction under section 151 is allowable to another 
taxpayer for a taxable year beginning in the cal-
endar year in which such individual’s taxable year 
begins. 
‘‘(4) COMMUNITY FOUNDATION.—For purposes 
of this section, the term ‘community foundation’ 
means a non-sectarian organization— 
‘‘(A) whose long-term goal is to build per-
manent, named component funds established by 
many separate donors for the broad-based char-
itable benefit of the residents of a defined geo-
graphic area, and 
‘‘(B) which—
‘‘(i) is described in section 501(c)(3) 
and exempt from tax under section 501(a), 
‘‘(ii) is not a private foundation, and 
‘‘(iii) is not controlled directly or indi-
rectly by one or more disqualified persons 
(as defined in section 4946, determined 
without regard to subsection (a)(1)(B) 
thereof). 
‘‘(d) TAX TREATMENT OF DISTRIBUTIONS.— 
‘‘(1) IN
GENERAL.—Any distribution from a 
personal philanthropy account shall be includible in 
the gross income of the account holder in the man-
ner as provided in section 72. 
‘‘(2) QUALIFIED PHILANTHROPY PAYMENTS.— 
‘‘(A) IN GENERAL.—No amount shall be 
includible in gross income under paragraph (1) 
to the extent that such distribution is a quali-
fied philanthropy payment. 
‘‘(B) QUALIFIED PHILANTHROPY PAYMENT 
DEFINED.—For purposes of this section, the 
term ‘qualified philanthropy payment’ means a 
distribution from a personal philanthropy ac-
count— 
‘‘(i) which is made, pursuant to a re-
quest by the account holder, by the trustee
of the account within 30 days after receipt 
by the trustee of a certification under sub-
paragraph (C), and 
‘‘(ii) which is paid for a purpose speci-
fied in section 170(c). 
A trustee who fails to meet the 30-day require-
ment of clause (i) shall be subject to disquali-
fication as a trustee. 
‘‘(C) ORGANIZATION CERTIFICATION.—For 
purposes of subparagraph (B)(i), a certification 
under this subparagraph is a certification by an 
organization pursuant to a written request by 
the trustee of a personal philanthropy account 
that the organization is an organization 
which— 
‘‘(i) is described in section 501(c)(3) 
and exempt from tax under section 501(a), 
and 
‘‘(ii) is not a personal philanthropy 
account. 
‘‘(D) COORDINATION
WITH
CHARITABLE 
CONTRIBUTIONS.— 
‘‘(i) No deduction shall be allowed 
under 
sections 
170, 
642(c), 
2055, 
2106(a)(2), or 2522 for any amount ex-
cluded from gross income under subpara-
graph (A), 
‘‘(ii) under regulations, the amount 
allowable as a deduction under sections 
170, 642(c), 2055, 2106(a)(2), or 2522 (as 
appropriate) for the taxable year (without 
regard to this clause) shall be reduced by 
the amount excluded from gross income for 
the taxable year under subparagraph (A), 
and 
‘‘(iii) section 170(d) shall not apply to 
any amount excluded from gross income 
under subparagraph (A). 
‘‘(3) ROLLOVER CONTRIBUTIONS.— 
‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply to any amount paid or distributed 
from a personal philanthropy account to the ex-
tent that the amount received is paid, not later 
than the 60th day after the date of such pay-
ment or distribution, into another personal phi-
lanthropy account of the same account holder. 
The preceding sentence shall not apply to any 
payment or distribution if it applied to any 
prior payment or distribution during the 12-
month period ending on the date of the pay-
ment or distribution. 
‘‘(B) HEIR.—Paragraph (1) shall not 
apply to any amount paid or distributed from 
a personal philanthropy account of a decedent 
to the extent that the amount received is paid, 
not later than the 60th day after the date of 
such payment or distribution, into the personal 
philanthropy account of an heir of the decedent, 
as designated by the will of the decedent. 
‘‘(e) TAX TREATMENT OF ACCOUNT.— 
‘‘(1) IN
GENERAL.—A personal philanthropy 
account shall be exempt from taxation under this 
subtitle. Notwithstanding the preceding sentence, 
the personal philanthropy account shall be subject to 
the taxes imposed by section 511 (relating to imposi-
tion of tax on unrelated business income of chari-
table organizations). 
‘‘(2) ACCOUNT TERMINATIONS.—Rules similar 
to the rules of paragraphs (2) and (4) of section 
408(e) shall apply to any personal philanthropy ac-
count. 
‘‘(f) DISQUALIFICATION OF TRUSTEE.—The trustee 
of a personal philanthropy account shall not be qualified 
to be a trustee of such account after a final determination
by the Secretary that the trustee has disbursed more than 
10 percent of its payments from personal philanthropy ac-
counts to non-qualifying organizations in a calendar year. 
‘‘(g) REPORTS.—The trustee of a personal philan-
thropy account shall make such reports regarding such ac-
count to the Secretary and to the holder the account with 
respect to contributions, distributions, and such other 
matters as the Secretary may require. The reports re-
quired by this subsection shall be filed at such time and 
in such manner and furnished to such individuals at such 
time and in such manner as may be required.’’. 
(b) DEDUCTION ALLOWED WHETHER OR NOT INDI-
VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 
of section 62 of such Code is amended by inserting before 
the flush sentence at the end the following new paragraph: 
‘‘(21) PERSONAL PHILANTHROPY ACCOUNTS.— 
The deduction allowed under section 224.’’. 
(c) EXCLUSION FOR EMPLOYER CONTRIBUTIONS TO 
PERSONAL PHILANTHROPY ACCOUNTS.— 
(1) IN GENERAL.—Part III of subchapter B of 
chapter 1 of such Code is amended by inserting 
after section 139A the following new section:
‘‘SEC. 139B. CONTRIBUTIONS BY EMPLOYER TO PERSONAL 
PHILANTHROPY ACCOUNTS. 
‘‘(a) IN GENERAL.—Gross income of an employee 
does not include contributions by the employer to the per-
sonal philanthropy account of the employee. 
‘‘(b) PERSONAL
PHILANTHROPY
ACCOUNT.—For 
purposes of this section, the term ‘personal philanthropy 
account’ shall have the meaning given to such term by 
section 224. 
‘‘(c) EXCLUSION NOT TO EXCEED COMPENSATION.— 
‘‘(1) EMPLOYEES.—The amount excluded from 
gross income by subsection (a) with respect to an 
employee shall not exceed such employee’s wages, 
salaries, tips, and other employee compensation 
which are attributable to such employee’s employ-
ment by the employer referred to in such subsection. 
‘‘(2) 
SELF-EMPLOYED
INDIVIDUALS.—The 
amount excluded from gross income by subsection 
(a) for contributions with respect to an individual 
who is self employed shall not exceed such individ-
ual’s earned income (as defined in section 401(c)(2)) 
derived by the taxpayer from the trade or business 
with respect to which the individual is self-employed. 
‘‘(3) COMMUNITY
PROPERTY
LAWS
NOT
TO 
APPLY.—The limitations under this subsection shall
be determined without regard to community prop-
erty laws.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 3121(a) of such Code is 
amended by striking ‘‘or’’ at the end of para-
graph (21), by striking the period at the end of 
paragraph (22) and inserting ‘‘; or ’’, and by 
inserting after paragraph (22) the following 
new paragraph: 
‘‘(23) any payment made to a personal philan-
thropy account (as defined in section 224) of an em-
ployee.’’. 
(B) Section 3231(e) of such Code is 
amended by adding at the end the following 
new paragraph: 
‘‘(13) PERSONAL
PHILANTHROPY
ACCOUNT 
CONTRIBUTIONS.—The term ‘compensation’ shall 
not include any payment made to a personal philan-
thropy account (as defined in section 224) of an em-
ployee.’’. 
(C) Section 3306(b) of such Code is 
amended by striking ‘‘or’’ at the end of para-
graph (18), by striking the period at the end of 
paragraph (19) and inserting ‘‘; or’’, and by in-
serting after paragraph (19) the following new 
paragraph: 
‘‘(20) any payment made to a personal philan-
thropy account (as defined in section 224) of an em-
ployee.’’. 
(D) Section 3401(a) of such Code is 
amended by striking ‘‘or’’ at the end of para-
graph (21), by striking the period at the end of 
paragraph (22) and inserting ‘‘; or’’, and by in-
serting after paragraph (22) the following new 
paragraph: 
‘‘(23) any payment made to a personal philan-
thropy account (as defined in section 224) of an em-
ployee.’’. 
(E) Section 6051(a) of such Code is 
amended by striking ‘‘and’’ at the end of para-
graph (12), by striking the period at the end of 
paragraph (13) and inserting ‘‘, and’’, and by 
inserting after paragraph (13) the following 
new paragraph: 
‘‘(14) the amount contributed to any personal 
philanthropy account (as defined in section 224) of 
such employee or such employee’s spouse.’’. 
(d) PROHIBITED TRANSACTIONS.—
(1) EXCEPTION FOR TAXABLE DISTRIBUTIONS 
FROM PERSONAL PHILANTHROPY ACCOUNTS.—Sub-
section (c) of section 4975 of such Code (defining to 
prohibited transaction) is amended by adding at the 
end the following new paragraph: 
‘‘(7) SPECIAL
RULE
FOR
PERSONAL
PHILAN-
THROPY ACCOUNTS.—An individual for whose ben-
efit a personal philanthropy account is established 
and any contributor to such account shall be exempt 
from the tax imposed by this section with respect to 
any transaction concerning such account (which 
would otherwise be taxable under this section) if sec-
tion 224(d) applies with respect to such trans-
action.’’. 
(2) PLAN DEFINED.—Paragraph (1) of section 
4975(e) of such Code is amended by striking ‘‘or’’ 
at the end of subparagraph (F), by striking the pe-
riod at the end of subparagraph (G) and inserting 
‘‘, or’’, and by inserting after subparagraph (G) the 
following new subparagraph: 
‘‘(H) a personal philanthropy account de-
scribed in section 224.’’. 
(e) PENALTY ON FAILURE TO REPORT.—Paragraph 
(2) of section 6693(a) of such Code (relating to provisions) 
is amended by striking ‘‘and’’ at the end of subparagraph
(D), by striking the period at the end of subparagraph 
(E) and inserting ‘‘, and’’, and by inserting after subpara-
graph (E) the following new subparagraph: 
‘‘(F) section 224(f) (relating to personal 
philanthropy accounts).’’. 
(f) CONFORMING AMENDMENT.—Paragraph (2) of 
section 26(b) of such Code is amended by striking ‘‘and’’ 
at the end of subparagraph (R), by striking the period 
at the end of subparagraph (S) and inserting ‘‘, and’’, and 
by adding at the end the following new subparagraph: 
‘‘(T) section 224(d)(3) relating to (relating 
to additional tax with respect to distributions 
not used for charitable contribution pur-
poses).’’. 
(g) CLERICAL AMENDMENTS.— 
(1) The table of sections for part VII of sub-
chapter B of chapter 1 of such Code is amended by 
redesignating the item relating to section 224 as an 
item relating to section 225 and by inserting after 
the item relating to section 223 the following new 
item: 
‘‘Sec. 224. Personal philanthropy accounts.’’. 
(2) The table of sections for part III of sub-
chapter B of chapter 1 of such Code is amended by
inserting after the item relating to section 139A the 
following new item: 
‘‘Sec. 139B. Contributions by employer to personal philanthropy accounts.’’. 
(h) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2004. 
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