Giving a car to charity can be a great way to help others and help yourself by getting rid of an old car you can’t use and getting a tax break in the bargain. The trouble is that just as there are often scams out there to take advantage of cash donating people there are also scams that can rip off those who are giving a car to charity. IRS auto donation needn’t be a complicated process if you can keep an eye out for these valuable points.
• Verify their Credentials: Make sure the organization you’re donating to is eligible for IRS Auto Donation. You can do this by checking the IRS website’s (or your local library) Publication 78 which is an annual list of organizations that the government has made eligible for this form of charitable tax break. Organizations which are religious in origin are tax deductable but won’t be found on Publication 78 as they are exempt from this classification.
• Use Guidestar: Guidestar is an online site that keeps track of charities and their tax deductible status. They list over 700,000 non-profits (keep in mind that local charities might require your own research and not have a listing on such a site). Giving a car to a charity that doesn’t have an established reputation is risky at best.
• Are they 501 (c) (3) Qualified? Most charitable, religious and educational programs fall under this classification. In order to qualify for tax deductable IRS Auto Donation your donation must be given to an organization that has this classification. Why? You’ll need to file an itemized tax form to receive your tax break. When you give a car to charity you’ll need to remember to ask if they have this qualification, you’ll need the special notice they give to get your IRS auto donation break.