Vehicle Donation

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Use Care When Making a Vehicle Donation

Across the nation, an increasing number of charities have turned to car donation programs in recent years as an effective way to raise money. Many of these charities run sound programs. But IRS and state officials are concerned that, as the end of the tax year approaches and taxpayers finalize their charitable donations, many may not know enough about the state and federal record keeping and filing requirements.

“When done correctly, donating a used car to a charity can help both the charity and the taxpayer,” said IRS Commissioner Charles Rossotti. “We want people to take a few simple steps to avoid possible problems and to make sure they get the proper tax deduction for their donation. Don’t get taken for a ride.’’

State officials have additional concerns about car donation programs, stemming from their mandate to safeguard charitable assets and to prevent deceptive donation practices. “We urge the public to take the proper steps to find out how their contributions will be used,’’ said Karin Kunstler Goldman, president of the National Association of State Charity Officials (NASCO) and an Assistant Attorney General in New York State. “Any reputable charity should be happy to provide potential donors with financial reports and other information about its activities.”

For a taxpayer, the appeal of a car donation is simple: Unload an old car, help a worthy cause and take advantage of tax provisions designed to support the generosity of Americans.