Reps. Panetta and Smith Request IRS and Treasury Fix Charitable Donation Deductions

WASHINGTON, DC - Today, Reps. Jimmy Panetta (D-Carmel Valley) and Adrian Smith (R-Nebraska) sent a letter to Assistant Treasury Secretary Lily Batchelder and Internal Revenue Service Commissioner Charles Rettig requesting they allow those making charitable food donations to recover their basis and receive enhanced deductions. Implementing these regulatory changes would encourage food donations at a time when working families are burdened with higher food prices across the country. The letter was sent on Giving Tuesday, which centers around making charitable donations during the holiday season.

"As the pandemic endures and food prices surge, so do the lines of people at our nations' food banks. That's why now, especially with the holidays upon us, we must make it easier for people to donate food to such impactful nonprofits," said Congressman Panetta. "Unfortunately, there are existing tax regulations that keep donors from getting reimbursed for food purchases. That's why Democrats and Republicans are coming together on this letter to ask the Treasury Department and IRS to change that rule and also allow donors to receive an enhanced deduction to cover the costs of preparing food and administering donations. It's a simple fix that will encourage donors, businesses, and restaurants to support our food banks and ensure working families have food on the table this holiday season and into the new year."

"Our tax code should reward businesses like grocers and restaurants for donating food instead of throwing it away - not punish them for it," said Rep. Adrian Smith. "As the price of food continues to increase, many Americans continue to struggle, and businesses have difficulty filling jobs, further guidance is needed to reduce the burden on restaurants, retailers, and distributors who dedicate time and resources to donating food. I was glad to join Congressman Panetta in asking Treasury to prioritize these rules and ensure food banks have every available resource to help feed their neighbors."

"The National Retail Federation, and our National Council of Chain Restaurants division, are greatly appreciative of efforts of Congressmen Jimmy Panetta (D-CA) and Adrian Smith (R-NE) to encourage the Treasury Department to clarify their regulations dealing with charitable donations of food inventory," said David French, Senior Vice President at the National Retail Federation. "The Treasury Department has recognized the need for this guidance since 2015. During this period of food insecurity for so many, we believe it is more important than ever to provide certainty with respect to the deductibility of costs related to food donations."

"Food banks across the state continue to serve elevated community need for food due to the economic hardship created by the pandemic, now complicated by rapidly rising food costs and supply chain challenges just in time for the holidays. The federal government needs to bring every tool at its disposal to help food banks support critical community allies like restaurants to combat hunger and drive recovery in our food economy, said Andrew Cheyne, director of government affairs for the California Association of Food Banks. "This is a win-win -- fight hunger and prevent food loss that drives climate changing methane emissions. We call on the Treasury Department and IRS to maximize food donations, and applaud Congressman Panetta's continued leadership supporting our mission to end hunger. Access to food is a basic human right and that's why we're calling everyone to the table this holiday season."

"There could not be a worse time to drop efforts to increase donations of prepared foods as food banks locally and nationally continue to address rates of food insecurity 50-70% above pre-pandemic levels. Recovery from the pandemic for our local communities and small businesses will be measured in years not months. Faced with significant reductions of USDA food and private support as the ongoing reality of deeper hunger moves off the front page, our local food banks need prepared food donors to have the same kinds of incentives as other food donors to feed our communities now more than ever," said Willy Elliott McCrea, Chief Executive Officer of Second Harvest Food Bank of Santa Cruz County.

"In communities across the country, restaurants continue to donate food and prepared meals to hunger relief organizations to help feed our food-insecure neighbors. This community support was a priority for the industry before the pandemic and will continue beyond our recovery. We appreciate Congressman Panetta's dedication to improving the tax regulations that would enable restaurants to donate more food to local hunger relief efforts," said Sean Kennedy, Executive Vice President of Public Affairs, National Restaurant Association.

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