Tax bill quietly eliminates IRS accuracy penalties while expanding charitable deduction
S. 317 — Charitable Act · Filed by James Lankford (R-OK) · 23 cosponsors · Introduced Jan 29, 2025 · Referred to committee
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What it does
This bill allows taxpayers who do not itemize deductions to claim a charitable contribution deduction for tax years 2026–2027, capped at one-third of the standard deduction. It also eliminates two accuracy-related tax penalties (the penalty under IRC §6662(b)(9) and the increased penalty under §6662(l)) and makes conforming changes to cross-references.
Why we flagged it
The bill's operative mechanism is a two-part tax code amendment: (1) a temporary charitable deduction for non-itemizers, and (2) elimination of two accuracy-related penalties. Both provisions reduce tax liability and enforcement, making this fundamentally a tax-relief measure with a secondary enforcement-reduction component.
- Elimination of §6662(b)(9) and §6662(l) penalties is substantively unrelated to charitable deduction policy and appears to be a separate tax-compliance/enforcement carve-out.
What the text implies
- The penalty elimination in subsection (b) is not limited to charitable-contribution errors; it removes accuracy penalties across all tax-reporting categories, potentially reducing IRS enforcement leverage on unrelated compliance issues.
- The charitable deduction is temporary (2026–2027 only), creating a sunset that may require future legislative action to extend, or may be designed to appear revenue-neutral in a 10-year budget window while providing immediate relief.
The full analysis lists 4 implications of this text.
Who stands to gain
individual taxpayers who donate to charity and do not itemize deductions; taxpayers subject to accuracy-related penalties under IRC §6662