Charitable Standard Mileage Rate: Considerations for Congress Page: 2 of 36
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Charitable Standard Mileage Rate: Considerations for Congress
In response to a sharp rise in gasoline prices, on June 23, 2008, the Internal Revenue Service
(IRS) announced an increase in the optional standard mileage rates for the second half of 2008,
for the two rates it has the authority to set. The IRS raised the standard mileage rate for business
use of a personal passenger automobile from 50.5 cents to 58.5 cents per mile, and the standard
rate for medical or moving purposes from 19 cents to 27 cents per mile, effective July 1, 2008,
through December 31, 2008. In contrast, the standard mileage rate for charitable activities is set
by statute and has remained at 14 cents per mile since 1998.
The charitable standard mileage rate is used to determine the size of the itemized deduction that a
taxpayer may claim for unreimbursed automobile expenses incurred in conjunction with
charitable volunteer work. The optional standard mileage rate is a simplified alternative to
keeping track of actual deductible automobile expenses. The charitable standard rate also
determines the amount of mileage reimbursement that a volunteer may receive tax-free from a
In evaluating whether the charitable standard mileage rate should now be higher than 14 cents a
mile, there are three basic questions to consider. First, should the charitable standard mileage rate
continue to be set by statute, or should authority to set the charitable rate be returned to the IRS?
Second, where should the charitable rate be set relative to the other two standard mileage rates,
and why? Should the charitable rate be equal to, or higher than, the medical/moving rate? If
higher, specifically what additional costs should be included? Should the charitable rate be as
high as the business rate? If so, on what reasoning is this based? Third, should reimbursed
mileage be treated more favorably than unreimbursed driving expenses?
Sixteen bills introduced in the 1 10 Congress would raise the charitable mileage rate, to different
levels. A second group of bills would permit volunteers to exclude from taxable income mileage
reimbursements up to the business standard mileage rate. A third group of bills would increase the
tax benefits only for charitable driving related to federally declared disasters, with tax-free
reimbursement up to the business rate and deductions at 70% of the business rate. The Heartland
Disaster Tax Relief Act of 2008, enacted on October 3, 2008, in conjunction with the Emergency
Economic Stabilization Act of 2008 (the financial rescue bill) as part of P.L. 110-343 (H.R. 1424),
grants these enhanced tax benefits to the federally declared Midwestern disaster areas, from the
date of the disaster through December 31, 2008.
Calculations presented in the report show that, under current tax law, volunteers who are
reimbursed for their driving expenses receive more favorable treatment than those who deduct
their unreimbursed mileage, even though the provisions are valued at the same number of cents
per mile. Setting the tax-free reimbursement amount higher than the deductible amount would
widen the existing disparity in after-tax benefits. The proposals do not explain or justify
increasing the preferential tax treatment of charitable mileage reimbursement relative to the
charitable mileage deduction. This report will be updated for the 111 Congress, as events
Congressional Research Service
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Charitable Standard Mileage Rate: Considerations for Congress, report, October 10, 2008; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc819689/m1/2/: accessed February 24, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.