Nonprofit
The sector where the IRS charitable rate (14¢/mi) and business rate (67¢/mi) coexist.
The third sector — NGOs, foundations, religious organizations — is the only category where two distinct IRS rates coexist within the same worker: 67¢/mi (business, for W-2 staff) and 14¢/mi (charitable, for volunteers). Confusing one with the other is the most common IRS audit finding in the sector. In Brazil, OSCIPs and NGOs with Termo de Fomento (Law 13.019/2014 — MROSC) require detailed accountability that includes per-service mileage.
The MROSC (Brazilian regulatory framework for civil society organizations) raised accountability standards — and NGOs that fail to document mileage lose government contract renewals. This guide covers MROSC, IRS Pub 517 (clergy), and NCC governance rules.
In the US, three regimes coexist: (1) W-2 staff — accountable plan required for non-taxable reimbursement; (2) volunteers — deduct at the charitable rate (14¢/mi in 2025) as Schedule A itemized deduction; (3) clergy — Pub 517 governs, with special treatment of housing allowance and Self-Employment Contributions Act (SECA).
In Brazil, OSCIP CLT employees receive standardized receipt reimbursement. NGOs with Termo de Fomento (public-sector partnership) must submit detailed accountability with per-service mileage. Volunteers do not have formal mileage deduction on the DIRPF.
Clergy with ecclesiastical bond (Law 12.973) receive reimbursement from the entity.
Field per-km is the standard structure for staff. For US volunteers, the only "structure" is the itemized deduction at the charitable rate. American clergy have the peculiarity of being able to choose between business mileage (pastoral visits, hospital, paid weddings) and charitable mileage (unpaid volunteer work for the parish).
Common mistakes in the third sector:
A well-documented nonprofit sector renews more public contracts and protects staff from unnecessary tax.