Car donation programs have grown so rapidly that the IRS and Congress decided to bring more oversight to the system.
Officials were concerned about reports of abuse in charitable giving.
Among the concerns: People seeking to dispose of unwanted cars were inflating the prices beyond their worth at tax time.
In 2005 the IRS issued new and detailed rules to curb problems.
Now car donation IRS rules require both the donor and charitable organization to keep detailed information on vehicle donations.
If donors want to get their car donation tax deduction, they need to follow car donation tax law.
Here's what the IRS expects:
* Transfer ownership of the car donation to the tax-exempt charity.
* Get a receipt from the charity when it receives the car. The receipt needs to include the charity's name and registration number.
* Document the amount the charity gets when it sells the car for proceeds. The charity is required to provide written acknowledgement to the donor after the sale.
* Be prepared to show how you calculated the value of the car, if the charity plans to keep it, or it is worth $500 or less. The charity needs to substantiate the value.
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