To amend the Internal Revenue Code of 1986 to provide a credit and a deduction for small political contributions.

February 17, 2005

Mr. PETRI (for himself, Mr. KANJORSKI, and Mr. RAHALL) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to provide a credit and a deduction for small political contributions.

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 `Citizen Involvement in Campaigns Act of 2005'.

SEC. 2. TAX CREDIT FOR CERTAIN POLITICAL CONTRIBUTIONS.

(a) In General- Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25B the following new section:

`SEC. 25C. CREDIT FOR CERTAIN POLITICAL CONTRIBUTIONS.

`(a) In General- In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to all qualified political contributions paid by the taxpayer during the taxable year.

`(b) Limitations-

`(1) MAXIMUM CREDIT- The credit allowed by subsection (a) shall not exceed $200 ($400 in the case of a joint return).

`(2) VERIFICATION- The credit allowed by subsection (a) shall be allowed with respect to any qualified political contribution only if such contribution is verified in such manner as the Secretary shall prescribe by regulation.

`(c) Definitions- For purposes of this section--

`(1) QUALIFIED POLITICAL CONTRIBUTION- The term `qualified political contribution' means a contribution or gift of money, or the fair market value of a contribution or gift of property, to--

`(A) an individual who is a candidate for nomination or election to any Federal elective public office in any primary, general, or special election, for use by such individual to further the candidacy of the individual for nomination or election to such office, or

`(B) the national committee of a national political party.

`(2) CANDIDATE- The term `candidate' means, with respect to any Federal elective public office, an individual who--

`(A) publicly announces before the close of the calendar year following the calendar year in which the political contribution is made that the individual is a candidate for nomination or election to such office; and

`(B) meets the qualifications prescribed by law to hold such office.

`(3) NATIONAL POLITICAL PARTY- The term `national political party' means--

`(A) in the case of qualified political contributions made during a taxable year of the taxpayer in which the electors of President and Vice President are chosen, a political party presenting candidates or electors for such offices on the official election ballot of ten or more States; or

`(B) in the case of qualified political contributions made during any other taxable year of the taxpayer, a political party which met the qualifications described in subparagraph (A) in the last preceding election of a President and Vice President.

`(d) Election not to Have Section Apply- A taxpayer may elect not to have this section apply with respect to qualified political contributions made during the taxable year.

`(e) Cross References-

`For transfer of appreciated property to a political organization, see section 84.

`For certain indirect contributions to political parties, see section 276.'.

(b) Conforming Amendment- The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code (relating to nonrefundable personal credits) is amended by inserting after the item relating to section 25B the following new item:

`Sec. 25C. Credit for certain political contributions.'.

(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31 of the calendar year in which this Act is enacted.

SEC. 3. DEDUCTION FOR CERTAIN POLITICAL CONTRIBUTIONS.

(a) In General- Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section:

`SEC. 224. POLITICAL CONTRIBUTIONS.

`(a) In General- In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the qualified political contributions made by the taxpayer during the taxable year.

`(b) Limitation- The amount allowed as a deduction under subsection (a) for the taxable year shall not exceed $600 ($1200 in the case of a joint return).

`(c) Qualified Political Contribution- For purposes of this section, the term `qualified political contribution' shall have the meaning given such term by section 25C(c)(1).

`(d) Denial of Double Benefit- No deduction shall be allowed under subsection (a) to a taxpayer for any qualified political contribution made during the taxable year if a credit is allowed to such taxpayer under section 25C for such year.'.

(b) Deduction Allowed Whether or not Taxpayer Itemizes Other Deductions- Subsection (a) of section 62 of such Code is amended by inserting before the last sentence at the end the following new paragraph:

`(21) QUALIFIED POLITICAL CONTRIBUTIONS- The deduction allowed by section 224.'.

(c) Clerical Amendment- The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by redesignating the item relating to section 224 as an item relating to section 225 and by inserting before such item the following new item:

`Sec. 224. Political contributions.'.

(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31 of the calendar year in which this Act is enacted.

END