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Senate Proposal - Fines & Charitable Miles

Here is an interesting combination. This proposal would increase fines, and also increase the deduction for miles driven for charitable activities. Why the combination? Because it allows offsetting the revenue effects - neutral impact on the total budget.

On the charitable mileage side, this proposal would increase the mileage rate to 40.5 cents/mile, the same as business use. That will provide a small but nice benefit to many people.

The provision is being funded by raising the fines associated with taxpayer misbehaviour. These changes are:

  • The fine for attempting to "evade or defeat tax" liabilities would change from $100,000 to $250,000.
  • The fine for moreserious violations would double from $500,000 to $1,000,000 per offense.
  • The maximum prison sentence would increase from 5 years to 10 years.
  • Taxpayers charged with "willful failure to file returns, supply information or pay tax" would fadce a felony charge rather than a misdemeanor. The potential penalty would change from the current maximum of 12 months for a misdemeanor to up to 10 years for a felony.

We have an obligation to pay our taxes, but no more. It just doesn't make good sense to break the law.

"Tax software is no substitute for tax knowledge."

Any views expressed herein are based on our best information. The content of this web site was written as general information without specific individual information and thus may not apply in all situations. This material was not written, and cannot be used by the taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.

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Janelle Ogg, EA
Richard Ogg, EA