(c) WAIVER OF CONTRIBUTION BASE LIMITATION ON 
CHARITABLE CONTRIBUTIONS.—Subsection (b) of section 
170 of such Code is amended by adding at the end the 
following new paragraph: 
‘‘(4) WAIVER
OF
LIMITATION
ON
CONTRIBU-
TIONS TO CHARITIES WITH LOSSES FROM FRAUDU-
LENT PONZI-TYPE SCHEME.— 
‘‘(A) IN GENERAL.—Paragraphs (1) and 
(2) shall not apply to any charity restoration 
deduction. 
‘‘(B) 
CHARITY
RESTORATION
DEDUC-
TION.— 
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, the term ‘charity restora-
tion deduction’ means the amount of chari-
table contributions made by the taxpayer 
during the taxable year to an organization 
described in subsection (c) which are des-
ignated by such organization for purposes 
of this paragraph. 
‘‘(ii) LIMITATION
ON
AMOUNT
DES-
IGNATED.—The aggregate amount which 
may be designated by an organization for 
purposes of this paragraph for all taxable 
years shall not exceed the aggregate deduc-
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tion which would be allowed to such orga-
nization under section 165(m) were such 
organization a taxpayer to which section 
165(m) applies. 
‘‘(C) OVERALL LIMITATION.—In no event 
shall the amount allowed as a deduction under 
this section for the taxable year by reason of 
this paragraph exceed the excess of the tax-
payer’s taxable income (determined without re-
gard to this paragraph) for such year over the 
deduction allowed under this section without re-
gard to this paragraph.’’. 
(d) RESTORATION OF UNIFIED CREDIT IN CERTAIN 
CASES.—Section 2505 of such Code (relating to unified 
credit) is amended by adding at the end the following new 
subsection: 
‘‘(d) RESTORATION OF UNIFIED CREDIT IN CERTAIN 
CASES.— 
‘‘(1) IN GENERAL.—If— 
‘‘(A) during any preceding calendar year, a 
taxpayer made a gift of an interest in an invest-
ment operation later determined to be a fraudu-
lent Ponzi-type scheme (as defined in section 
165(m)(2)), 
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‘‘(B) the taxpayer reported the amount of 
such gift on a timely filed return under this 
chapter, and 
‘‘(C) the taxpayer subsequently makes a 
gift to the donee which received the gift re-
ferred to in subparagraph (A), 
the amount under subsection (a)(2) for the calendar 
year in which the gift referred to in subparagraph 
(C) is made and subsequent calendar years (deter-
mined without regard to such gift) shall be reduced 
by the gift restoration amount. 
‘‘(2) GIFT RESTORATION AMOUNT.—For pur-
poses of paragraph (1), the gift restoration amount 
is the lesser of— 
‘‘(A) the amount of credit allowable under 
this section with respect to the gift described in 
paragraph (1)(C) (or would be allowable with-
out regard to the limitation in subsection 
(a)(1)), or 
‘‘(B) the amount of credit which would be 
so allowable with respect to a gift equal to the 
amount of the donee’s loss on such interest 
(without taking into account any potential re-
coveries) which can reasonably be estimated as 
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