S 110

112th CONGRESS
1st Session

S. 110

To amend the Internal Revenue Code of 1986 to promote charitable donations of qualified vehicles.

IN THE SENATE OF THE UNITED STATES

January 25 (legislative day, January 5), 2011

Mr. ENSIGN introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To amend the Internal Revenue Code of 1986 to promote charitable donations of qualified vehicles.

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

SECTION 1. TREATMENT OF QUALIFIED VEHICLE DONATIONS.

    (a) In General- Subparagraph (A) of section 170(f)(12) of the Internal Revenue Code of 1986 (relating to general rule for contributions of used motor vehicles, boats, and airplanes) is amended to read as follows:

        `(A) IN GENERAL- In the case of a contribution of a qualified vehicle, paragraph (8) shall not apply and no deduction shall be allowed under subsection (a) for such contribution unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgment of the contribution by the donee organization that meets the requirements of subparagraph (B) and includes the acknowledgment with the taxpayer's return of tax which includes the deduction.'.

    (b) Content of Acknowledgment- Subparagraph (B) of section 170(f)(12) of such Code is amended by striking clauses (iii), (iv), (v), and (vi) and inserting the following:

          `(iii) In the case of a qualified vehicle that is not sold by the organization--

            `(I) a certification of the intended use or material improvement of the vehicle and the intended duration of such use, and

            `(II) a certification that the vehicle would not be transferred in exchange for money, other property, or services before completion of such use or improvement.

          `(iv) In the case of any qualified vehicle the claimed value of which does not exceed $2,500--

            `(I) the fair market value of the vehicle as determined in accordance with regulations prescribed by the Secretary,

            `(II) a statement that the deductible amount may not exceed the fair market value of the vehicle, and

            `(III) if the organization sells the vehicle without any significant intervening use or material improvement a certification that the vehicle was sold in an arm's length transaction between unrelated parties.

          `(v) In the case of any qualified vehicle the claimed value of which exceeds $2,500--

            `(I) a qualified appraisal as defined in subparagraph (E) of paragraph (11) of this section,

            `(II) a statement that the deductible amount may not exceed the appraised value of the vehicle, and

            `(III) if the organization sells the vehicle without any significant intervening use or material improvement a certification that the vehicle was sold in an arm's length transaction between unrelated parties.'.

    (c) Contemporaneous- Subparagraph (C) of section 170(f)(12) of such Code (relating to contemporaneous) is amended by striking `days of--' and all that follows and inserting `days of the contribution of the qualified vehicle.'.

    (d) Regulations- Subparagraph (F) of section 170(f)(12) of such Code (relating to regulations) is amended by striking the last sentence.

    (e) Clerical Amendment- Section 170(f)(12) of such Code, as amended by this section, is amended by striking `acknowledgement' each place it occurs and inserting `acknowledgment'.

    (f) Penalty for Fraudulent Acknowledgments- Section 6720 of such Code (relating to fraudulent acknowledgment with respect to donations of motor vehicles, boats, and airplanes) is amended by striking `equal to--' and all that follows and inserting the following:

    `equal to the greater of--

      `(1) the product of the highest rate of tax specified in section 1 and the claimed value of the vehicle, or

      `(2) $5,000.'.

    (g) Effective Date- The amendments made by this section shall apply to contributions made after the date of the enactment of this Act.

END