NEW YORK (CNN/Money) - A provision in the tax relief package to aid victims of Hurricane Katrina may cost the government billions in lost revenue, according to a report Thursday.

Many wealthy Americans are increasing their giving this year and reducing their tax bills, the New York Times said, thanks to a provision which allows donors who make gifts to almost any charity by Dec. 31 to deduct virtually 100 percent of their adjusted gross incomes, double the normal limit.

Some philanthropies and institutions are encouraging big donors to make sizable gifts and take advantage of the favorable tax treatment this year.

Experts believe the government may lose more tax revenue than Congress originally anticipated.

According to the report, the provision could encourage $4 billion to $10 billion in additional giving this year; which would mean $1 billion to $3.5 billion in lost revenue for the Treasury.

Some donors may also be able to take deductions for gifts made in past years. When taxpayers have more charitable deductions that they can use in a given year, they may carry them forward to future tax years, which could further dampen tax revenues, the paper said.

"Congress intended this, but I'm not sure they understood how big the tab is going to be," Robert Sharpe Jr., a fund-raising consultant, told the Times.

Congress was willing to give up some revenue to encourage Americans to help hurricane disaster victims as well as make contributions to other organizations, including cultural institutions and schools, the paper said.

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