Title: Charities Helping Americans Regularly Throughout the Year Act of 2017
Policy area: Taxation

Summary:
Charities Helping Americans Regularly Throughout the Year Act of 2017
This bill amends the Internal Revenue Code to modify several tax provisions affecting charitable contributions and tax-exempt organizations.
The Internal Revenue Service may determine the standard mileage rate for deducting the cost of using a passenger automobile for charitable purposes (currently set by statute at 14 cents per mile), and the rate may not be less than the rate for medical purposes (17 cents per mile for 2017).
The bill modifies the substantiation requirements for charitable contributions to eliminate an exemption for contributions that are reported on a return filed by a tax-exempt organization.
Tax-exempt organizations must file their returns in electronic form.
The bill excludes from the gross income of an individual who is at least 70-1/2 years of age up to $100,000 in distributions from an individual retirement plan to a donor-advised fund (DAF). The bill also modifies disclosure requirements for DAFs.
(A DAF is a fund or account that is separately identified by reference to contributions of a donor or donors. The account is owned and controlled by a sponsoring charitable organization, while the donor retains advisory privileges with respect to the distribution and investment of funds in the account.)
The bill reduces from 2% to 1% the excise tax on the investment income of private foundations and eliminates a provision that reduces the rate to 1% if a foundation meets certain distribution requirements.
The bill exempts certain philanthropic business holdings from the tax on excess business holdings of private foundations if a foundation meets requirements for exclusive ownership, donating all profits to charity, and independent operation.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1343 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                S. 1343

    To amend the Internal Revenue Code to extend and modify certain 
                       charitable tax provisions.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 13, 2017

    Mr. Thune (for himself, Mr. Casey, Mr. Wyden, and Mr. Roberts) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code to extend and modify certain 
                       charitable tax provisions.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Charities Helping Americans 
Regularly Throughout the Year Act of 2017''.

SEC. 2. SENSE OF THE SENATE RELATING TO THE PROTECTION OF CHARITABLE 
              DEDUCTIONS.

    (a) Findings.--The Senate makes the following findings:
            (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 estimated to be 
        $373,250,000,000 (a 4.1-percent increase 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.

SEC. 3. DETERMINATION OF STANDARD MILEAGE RATE FOR CHARITABLE 
              CONTRIBUTIONS DEDUCTION.

    (a) Determination of Standard Mileage Rate for Charitable 
Contributions Deduction.--Subsection (i) of section 170 of the Internal 
Revenue Code of 1986 is amended to read as follows:
    ``(i) Standard Mileage Rate for Use of Passenger Automobile.--For 
purposes of computing the deduction under this section for use of a 
passenger automobile, the standard mileage rate shall be the rate 
determined 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 REQUIREMENTS FOR CHARITABLE 
              CONTRIBUTIONS.

    (a) In General.--Paragraph (8) of section 170(f)(8) of the Internal 
Revenue Code of 1986 is amended 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.

SEC. 5. MANDATORY ELECTRONIC FILING FOR ANNUAL RETURNS OF EXEMPT 
              ORGANIZATIONS.

    (a) In General.--Section 6033 of the Internal Revenue 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 organization required to 
file a return under this section shall file such return in electronic 
form.''.
    (b) Inspection of Electronically Filed Annual 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 paragraph (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 organizations for 
                        which the Secretary determines the application 
                        of the amendments made by subsection (a) would 
                        cause undue burden 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 purposes of 
                        clause (i), the term ``small organization'' 
                        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 required to file a return under section 
                6033 of such Code and include information under 
                subsection (e) thereof, the Secretary may delay the 
                application of the amendments made by this section, but 
                not later than taxable years beginning 2 years after 
                the date of the enactment of this Act.

SEC. 6. MODIFICATION OF RULES RELATING TO DONOR ADVISED FUNDS.

    (a) Allowance of Tax-Free Charitable Distributions From Individual 
Retirement Accounts.--
            (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 described 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 period at the 
                end and inserting a comma; and
                    (C) by adding at the end the following new 
                paragraphs:
            ``(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 publicly 
                available policy with respect to funds which are 
                inactive, dormant, or do not make distributions during 
                the period described in paragraph (4),
                    ``(B) a description of the organization's policy 
                for responding to funds described in subparagraph (A) 
                or a statement that no such policy is in effect, and
                    ``(C) whether such organization regularly and 
                consistently monitors and enforces compliance 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.

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 Foundation Meets Certain 
Distribution Requirements.--Section 4940 of such Code is amended by 
striking 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 Revenue 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 foundation in any business 
        enterprise which for the taxable year meets--
                    ``(A) the exclusive ownership requirements of 
                paragraph (2),
                    ``(B) the all profits to charity requirement of 
                paragraph (3), and
                    ``(C) the independent operation requirements 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 acquired 
                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.
                    ``(B) Net operating income.--For purposes of this 
                paragraph, the net operating income of any business 
                enterprise for any taxable year is an amount equal to 
                the gross income of the business enterprise for the 
                taxable year, reduced by the sum of--
                            ``(i) the deductions allowed by chapter 1 
                        for the taxable year which are directly 
                        connected with the production of such income,
                            ``(ii) the tax imposed by chapter 1 on the 
                        business enterprise for the taxable year, and
                            ``(iii) an amount for a reasonable reserve 
                        for working capital and other business needs of 
                        the business enterprise.
            ``(4) Independent operation.--The independent 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 foundation, or 
                family member of such a contributor (determined under 
                section 4958(f)(4)), is a director, officer, trustee, 
                manager, employee, or contractor of the business 
                enterprise (or an individual having powers or 
                responsibilities similar to any of the foregoing),
                    ``(B) at least a majority of the board of directors 
                of the private foundation are individuals other than 
                individuals who are either--
                            ``(i) directors or officers of the business 
                        enterprise, or
                            ``(ii) members of the family (determined 
                        under section 4958(f)(4)) of a substantial 
                        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 determined).
            ``(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
                    ``(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.
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