(1) The deduction for charitable contributions 
has been an important and effective part of the tax 
code for almost 100 years. 
(2) The deduction for charitable contributions 
is unique as it is the only provision that encourages 
taxpayers to give away a portion of their income for 
the benefit of others. 
(3) In 2012, nonprofit organizations provided 
11,400,000 jobs, accounting for 10.3 percent of the 
country’s private-sector workforce. 
(4) In 2015, total charitable giving was esti-
mated to be $373,250,000,000 (a 4.1-percent in-
crease from 2014) and accounted for 2.1 percent of 
the gross domestic product. 
(b) SENSE OF THE SENATE.—It is the sense of the 
Senate that— 
(1) encouraging charitable giving should be a 
goal of tax reform; and 
(2) Congress should ensure that the value and 
scope of the deduction for charitable contributions is 
not diminished during a comprehensive reform of the 
tax code. 
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SEC. 3. DETERMINATION OF STANDARD MILEAGE RATE 
FOR CHARITABLE CONTRIBUTIONS DEDUC-
TION. 
(a) DETERMINATION OF STANDARD MILEAGE RATE 
FOR CHARITABLE CONTRIBUTIONS DEDUCTION.—Sub-
section (i) of section 170 of the Internal Revenue Code 
of 1986 is amended to read as follows: 
‘‘(i) STANDARD MILEAGE RATE FOR USE OF PAS-
SENGER AUTOMOBILE.—For purposes of computing the 
deduction under this section for use of a passenger auto-
mobile, the standard mileage rate shall be the rate deter-
mined by the Secretary, which rate shall not be less than 
the standard mileage rate used for purposes of section 
213.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to miles traveled after the date 
of the enactment of this Act. 
SEC. 4. MODIFICATION OF SUBSTANTIATION REQUIRE-
MENTS FOR CHARITABLE CONTRIBUTIONS. 
(a) 
IN
GENERAL.—Paragraph 
(8) 
of 
section 
170(f)(8) of the Internal Revenue Code of 1986 is amend-
ed by striking subparagraph (D) and by redesignating 
subparagraph (E) as subparagraph (D). 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions made in taxable 
years beginning after December 31, 2016. 
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SEC. 5. MANDATORY ELECTRONIC FILING FOR ANNUAL RE-
TURNS OF EXEMPT ORGANIZATIONS. 
(a) IN GENERAL.—Section 6033 of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection 
(n) as subsection (o) and by inserting after subsection (m) 
the following new subsection: 
‘‘(n) MANDATORY ELECTRONIC FILING.—Any orga-
nization required to file a return under this section shall 
file such return in electronic form.’’. 
(b) INSPECTION OF ELECTRONICALLY FILED AN-
NUAL RETURNS.—Subsection (b) of section 6104 is 
amended by adding at the end the following: ‘‘Any annual 
return required to be filed electronically under section 
6033(n) shall be made available by the Secretary to the 
public in machine readable format.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to taxable years beginning after the date 
of the enactment of this Act. 
(2) TRANSITIONAL RELIEF.— 
(A) SMALL ORGANIZATIONS.— 
(i) IN GENERAL.—In the case of any 
small organizations, or any other organiza-
tions for which the Secretary determines 
the application of the amendments made 
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by subsection (a) would cause undue bur-
den without a delay, the Secretary may 
delay the application of such amendments, 
but not later than taxable years beginning 
2 years after the date of the enactment of 
this Act. 
(ii) SMALL ORGANIZATION.—For pur-
poses of clause (i), the term ‘‘small organi-
zation’’ means any organization— 
(I) the gross receipts of which for 
the 
taxable 
year 
are 
less 
than 
$200,000; and 
(II) the aggregate gross assets of 
which at the end of the taxable year 
are less than $500,000. 
(B) ORGANIZATIONS
FILING
FORM
990– 
T.—In the case of any organization described in 
section 511(a)(2) of the Internal Revenue Code 
of 1986 which is subject to the tax imposed by 
section 511(a)(1) of such Code on its unrelated 
business taxable income, or any organization re-
quired to file a return under section 6033 of 
such Code and include information under sub-
section (e) thereof, the Secretary may delay the 
application of the amendments made by this 
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section, but not later than taxable years begin-
ning 2 years after the date of the enactment of 
this Act. 
SEC. 6. MODIFICATION OF RULES RELATING TO DONOR AD-
VISED FUNDS. 
(a) ALLOWANCE OF TAX-FREE CHARITABLE DIS-
TRIBUTIONS
FROM
INDIVIDUAL
RETIREMENT
AC-
COUNTS.— 
(1) 
IN
GENERAL.—Clause 
(i) 
of 
section 
408(d)(8)(B) of the Internal Revenue Code of 1986 
is amended by striking ‘‘or any fund or account de-
scribed in section 4966(d)(2)’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to distributions made 
in taxable years beginning after December 31, 2016. 
(b) RETURN DISCLOSURES.— 
(1) DISTRIBUTIONS.—Subsection (k) of section 
6033 of the Internal Revenue Code of 1986 is 
amended— 
(A) in paragraph (2), by striking ‘‘and’’ at 
the end; 
(B) in paragraph (3), by striking the pe-
riod at the end and inserting a comma; and 
(C) by adding at the end the following new 
paragraphs: 
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‘‘(4) list the total number of such funds which 
were in existence for the 36-month period ending at 
the close of such taxable year, 
‘‘(5) list the total number of funds described in 
paragraph (4) which made at least 1 grant during 
the period described in such paragraph, and 
‘‘(6) set forth— 
‘‘(A) whether such organization has a pub-
licly available policy with respect to funds which 
are inactive, dormant, or do not make distribu-
tions during the period described in paragraph 
(4), 
‘‘(B) a description of the organization’s 
policy for responding to funds described in sub-
paragraph (A) or a statement that no such pol-
icy is in effect, and 
‘‘(C) whether such organization regularly 
and consistently monitors and enforces compli-
ance with the policy described in subparagraph 
(A) with respect to such funds.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to returns for taxable 
years beginning after December 31, 2017. 
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SEC. 7. MODIFICATION OF THE TAX RATE FOR THE EXCISE 
TAX ON INVESTMENT INCOME OF PRIVATE 
FOUNDATIONS. 
(a) IN GENERAL.—Section 4940(a) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘2 percent’’ 
and inserting ‘‘1 percent’’. 
(b) ELIMINATION OF REDUCED TAX WHERE FOUN-
DATION
MEETS
CERTAIN
DISTRIBUTION
REQUIRE-
MENTS.—Section 4940 of such Code is amended by strik-
ing subsection (e). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 8. EXCEPTION FROM PRIVATE FOUNDATION EXCESS 
BUSINESS 
HOLDINGS 
TAX 
FOR 
CERTAIN 
PHILANTHROPIC BUSINESS HOLDINGS. 
(a) IN GENERAL.—Section 4943 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(g) EXCEPTION
FOR
CERTAIN
PHILANTHROPIC 
BUSINESS HOLDINGS.— 
‘‘(1) IN
GENERAL.—Subsection (a) shall not 
apply with respect to the holdings of a private foun-
dation in any business enterprise which for the tax-
able year meets— 
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‘‘(A) the exclusive ownership requirements 
of paragraph (2), 
‘‘(B) the all profits to charity requirement 
of paragraph (3), and 
‘‘(C) the independent operation require-
ments of paragraph (4). 
‘‘(2) EXCLUSIVE
OWNERSHIP.—The exclusive 
ownership requirements of this paragraph are met 
if— 
‘‘(A) all ownership interests in the business 
enterprise are held by the private foundation at 
all times during the taxable year, and 
‘‘(B) all the private foundation’s ownership 
interests in the business enterprise were ac-
quired under the terms of a will or trust upon 
the death of the testator or settlor, as the case 
may be. 
‘‘(3) ALL PROFITS TO CHARITY.— 
‘‘(A) IN
GENERAL.—The all profits to 
charity requirement of this paragraph is met if 
the business enterprise, not later than 120 days 
after the close of the taxable year, distributes 
an amount equal to its net operating income for 
such taxable year to the private foundation. 
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‘‘(B) NET OPERATING INCOME.—For pur-
poses of this paragraph, the net operating in-
come of any business enterprise for any taxable 
year is an amount equal to the gross income of 
the business enterprise for the taxable year, re-
duced by the sum of— 
‘‘(i) the deductions allowed by chapter 
1 for the taxable year which are directly 
connected with the production of such in-
come, 
‘‘(ii) the tax imposed by chapter 1 on 
the business enterprise for the taxable 
year, and 
‘‘(iii) an amount for a reasonable re-
serve for working capital and other busi-
ness needs of the business enterprise. 
‘‘(4) INDEPENDENT
OPERATION.—The inde-
pendent operation requirements of this paragraph 
are met if, at all times during the taxable year— 
‘‘(A) no substantial contributor (as defined 
in section 4958(c)(3)(C)) to the private founda-
tion, or family member of such a contributor 
(determined under section 4958(f)(4)), is a di-
rector, officer, trustee, manager, employee, or 
contractor of the business enterprise (or an in-
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dividual having powers or responsibilities simi-
lar to any of the foregoing), 
‘‘(B) at least a majority of the board of di-
rectors of the private foundation are individuals 
other than individuals who are either— 
‘‘(i) directors or officers of the busi-
ness enterprise, or 
‘‘(ii) members of the family (deter-
mined under section 4958(f)(4)) of a sub-
stantial contributor (as defined in section 
4958(c)(3)(C)) to the private foundation, 
and 
‘‘(C) there is no loan outstanding from the 
business enterprise to a substantial contributor 
(as so defined) to the private foundation or a 
family member of such contributor (as so deter-
mined). 
‘‘(5) CERTAIN DEEMED PRIVATE FOUNDATIONS 
EXCLUDED.—This subsection shall not apply to— 
‘‘(A) any fund or organization treated as a 
private foundation for purposes of this section 
by reason of subsection (e) or (f), 
‘‘(B) any trust described in section 
4947(a)(1) (relating to charitable trusts), and 
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‘‘(C) any trust described in section 
4947(a)(2) (relating to split-interest trusts).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
Æ 
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