tax deduction tsunami relief donations

To: Reporters and Editors Re: Extended tax deduction proposal for tsunami donations Day: Tuesday, Jan. 4, 2005

Sen. Chuck Grassley, chairman of the Committee on Finance, today joined Sen. Max Baucus, ranking member, in announcing a plan to extend the period of time in which Americans can claim tax deductions for charitable donations to assist victims of the earthquake and tsunami that hit Southeast Asia on December 26.

The tax proposal comes a day after the announcement of the President’s naming of former Presidents Clinton and Bush to lead a massive fund-raising drive for the disaster. Under this proposal, taxpayers would be permitted to claim a tax deduction in tax year 2004 for donations made for tsunami disaster relief until Jan. 31, 2005.

Under current law, taxpayers would have to wait until next year’s filing season to claim a tax deduction for tsunami-related gifts made after Dec. 31, 2004.

The proposal would be limited to cash gifts made specifically for disaster relief. Sen. Grassley made the following comment on the new tax proposal. “Americans are giving generously to tsunami relief, as they did after Sept. 11. I hope this extension will encourage them to give even more. As they do, I hope they’ll make sure the charities they choose match their good intentions

Inevitably some con artists will try to turn this tragedy into a profit-making venture. Instead of falling victim to opportunists, Americans should consider the many good sources of information about legitimate charities. For example, the Better Business Bureau Wise Giving Alliance and GuideStar both have resources online to guide donors. A little research can go a long way toward stopping crooks in their tracks.”

Baucus Pushes for Prompt Passage of Tsunami Relief Relief Organizations Throw Support Behind Baucus’ Tax Proposal to Aid Relief Effort

For Immediate Release Contact: Jon Selib Wednesday, January 5, 2005 202-224-4515

(WASHINGTON, D.C.) Today, U.S. Senator Max Baucus (D-Mont), continued to push for the
quick passage of legislation that would extend the period of time Americans can make charitable donations in order to assist victims of the earthquake and tsunami that hit Southeast Asia on December 26. The Baucus/Grassley measure has received widespread support from both parties in Congress as well as backing from the charitable organizations coordinating the relief efforts in the region.

Under this proposal, taxpayers would be permitted to claim a tax deduction in tax year 2004 for donations made before January 31, 2005 for tsunami disaster relief. Under current law, taxpayers would have to wait until 2006 to claim a tax deduction for tsunami-related gifts made during January 2005.

“Americans are rising to the occasion and leading the world in assisting disaster victims in Southeast Asia,” Baucus said. “Giving the American people an added incentive to make a donation to those in need will give us the opportunity to live up to its image as being a compassionate and benevolent country.”

Aid for Tsunami Victims May be Tax Deductible

Contributions to domestic, tax-exempt, charitable organizations that provide assistance to individuals in foreign lands qualify as tax-deductible contributions for federal income tax purposes provided the U.S. organization has full control and discretion over the uses of such funds.

Publication 3833, Disaster Relief: Providing Assistance through Charitable Organizations ( PDF 507K), explains how the public can use charitable organizations to help victims of disasters, and how new organizations can obtain tax-exempt status.

Contributions are deductible for the year in which they are actually made.
SOURCE: IRS