Schumer: IRS Reimburses Charity Volunteers at An Appalling Rate of 14 Cents/Mile While Business Rate Is 58.5 Cents/Mile - Charities Across CNY Hurt by High Gas Prices & Low Deduction

Press Release

SCHUMER: IRS REIMBURSES CHARITY VOLUNTEERS AT AN APPALLING RATE OF 14 CENTS/MILE WHILE BUSINESS RATE IS 58.5 CENTS/MILE - CHARITIES ACROSS CNY HURT BY HIGH GAS PRICES & LOW DEDUCTION

With Gas Prices Sky-High, Pathetic Reimbursement Rate Reduces Volunteer Corps Needed To Deliver Essential Services Like Food to Our Seniors

Schumer Bill That Would Immediately Double the Charity Mileage Reimbursement Rate Is Gaining Steam & Support; Would Also Allow Charity Volunteers to Deduct Much More from Their Taxes

Schumer to Announce Push To Pass Legislat

As Central New York charities and volunteers are hit by high gas prices due, in part, to an appalling 14 cents per mile Internal Revenue Service (IRS) charity mileage reimbursement rate, U.S. Senator Charles E. Schumer today announced his drive to pass his bipartisan legislation to dramatically increase the size of the tax deduction for miles driven while performing charity work before the end of the year. Business travelers received a gas mileage rate hike this summer from the IRS to 58.5 cents per mile but the rate for charity workers remained at just 14 cents per mile because the IRS needs an act of Congress to change the charity worker reimbursement rate.

Schumer's legislation, which would immediately double the current rate of 14 cents per mile and ensure the rate increases every year, is gaining steam in Congress. To date, hundreds of charity groups support the bill, including national groups like AARP, The Red Cross, and The United Way, and congressional support is growing. More than one third of the Senate has cosponsored a compromise bill.

"Bottom line, delivering meals on wheels shouldn't put you in the fast lane to the poor house. The size of the gas mileage deduction for charity workers is paltry and antiquated," Schumer said. "Right now, charities are being punished because the law has not kept pace with the spike in gas costs. This fix will allow charity workers to keep doing their important work despite the pain at the pump."

Local charities provide critical assistance to residents across Central New York, including food delivery, home aide visits, doctor's visits and other services that require volunteers and employees to drive. But soaring gas prices are forcing many local charity workers and charities to either cut back or cut off the much-needed services.

In June, the IRS increased the mileage rate for business use from 50.5 cents per mile to 58.5 cents. Americans who use their car to perform charity work are also allowed to take a deduction on their taxes for each mile driven. But due to a quirk, the IRS does not have the power to make adjustments administratively to the mileage rate for charity work. That rate, which has been stuck at 14 cents for 10 years even though gas prices have tripled, can only be adjusted by statute.

According to the American Automobile Association, in 2007, for an average car driven 10,000 miles a year, the true cost of gas per mile driven was closer to 71 cents a mile - and that was before gas prices soared to above $4/gallon this year.

In an effort to help charities slammed by record-high gas prices, Schumer is pushing for passage of his legislation that would raise the charity mileage rate and eliminate the income tax on reimbursements. The compromise bill would require that the IRS set the charity rate at no less than the rate set every year for moving and medical expenses - currently 27 cents per mile. In addition, the legislation would also change current law so that if a charity chooses to reimburse a volunteer at the full business rate, the difference between the charity and business rate does not count as income to the taxpayer. This would provide a benefit to many volunteers that do not itemize their deductions, and could encourage charities to start offering their own reimbursement rates.

The legislation would boost the incentive for volunteers to continue performing work for charities, even as rising gas costs threatens to make those activities cost-prohibitive. Dozens of volunteer organizations have described a severe drop in participation as gas costs have risen above four dollars a gallon.

Schumer's bipartisan bill, called the Giving Incentives to Volunteers Everywhere (GIVE) Act of 2008, was recently reintroduced in the Senate with Senators Benjamin Cardin (D-MD), Olympia Snowe (R-ME), John Ensign (R-NV) Russ Feingold (D-WI), Barbara Mikulski (D-MD), and Chuck Grassley (R-IA). The bill now has 33 cosponsors and was introduced in an identical House bill by Reps. John Lewis and Jim Ramstad (H.R. 6854).

Today, Schumer was joined by Mason Kaufman, Executive Director from Meals on Wheels, Syracuse; Nancy Schmid, Nutrition Program Director from the Onondaga County Department of Aging and Youth; Sue Fernandez, President from ECHO Meals on Wheels - West; and David France, Board Member from Meals on Wheels, Syracuse; Maria Mahar, Nutrition Services Coordinator from Onondaga County Department of Aging and Youth; Terry Welcher, Director of Volunteers from the American Red Cross, Onondaga-Oswego Chapter; Dick Blansett, Director of Public Support from the American Red Cross, Onondaga-Oswego Chapter; and Joe Ruth, Board Member from East Syracuse-Minoa Meals on Wheels.

"The GIVE Act is vitally important to helping charitable groups throughout the state recruit and retain the many volunteers who use their own motor vehicles to help people in need," said Lois Aronstein, AARP New York State Director.

"Gas prices have skyrocketed, however the IRS mileage reimbursement rate has not changed since 1998, and is just 14 cents per mile. Meals on Wheels Programs around the country, including mine are losing volunteers due to higher gas prices. The legislation Senator Schumer and his co-sponsors are proposing to raise the reimbursement rate would go a long way to helping non-profits who depend on volunteer drivers to retain and recruit volunteers and continue to serve our community. This legislation needs to pass for the sake of those we help," said Mason Kaufman, Executive Director of Meals on Wheels of Syracuse.

Nationwide, over 310 leading charitable organizations publicly embraced the legislation, including the Red Cross, United Way, Catholic Charities, Independent Sector and the UJA Federation of Jewish Philanthropies of New York.

Gail J. McGovern, President and CEO of the American Red Cross, said: "The American Red Cross strongly supports this bill to help relieve the burden of gas prices on volunteers who donate their time to serve people in need. It will help ensure that Red Cross volunteers can continue to respond to some 200 disasters and emergencies every day in communities across our country."

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