Charles Grassley, R-Iowa, ranking member of the Senate Finance Committee, said he planned to co-sponsor a bill that will update the deductible cost of operating a vehicle for charitable purposes.

The bill, known as the Fair Deal for Volunteers Act, was introduced by Sens. Benjamin Cardin, D-Md.; Barbara Mikulski, D-Md.; and Olympia Snowe, R-Maine; in July and is pending in the Senate Finance Committee.

The Internal Revenue Service has the authority to change the standard mileage rates for computing the deductible costs of operating an automobile for business, medical or moving expenses, Grassley noted. However, the agency does not have the authority to change the mileage rate for calculating the deductible cost of operating a vehicle for charitable purposes. The IRS had this discretion prior to the Deficit Reduction Act of 1984, when the charitable mileage reimbursement rate became fixed in statute.

"People who volunteer for charity aren't out to make money, but they shouldn't lose a lot of money in the process," said Grassley in a statement. "Driving a car is more expensive than ever, and driving is critical to a lot of volunteer activities. With high gas prices, some people might decide they can't afford to deliver meals to the homebound. It makes sense to give the IRS the flexibility to set mileage rates for charity work."

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