While the car donation tax deduction you can get is the same everywhere, the way each state qualifies and verifies charities is not the same. But it’s also important to realize that each state has fraudulent car donation charities (or professional solicitation services for the charities) operating under the radar. These bogus charities may appear professional at first glance, but are really total scams. So you should check out a charity before donating your car or truck. Luckily, there’s a website that makes this a breeze, but more on that later.
But even well-meaning charities may not be operating legally. Often this is because they haven’t paid a fee to the Attorney General’s office for that state, or forgot to file some form. In some states the Secretary of State is the office that regulates charities. Regardless, you need to use due diligence before donating your used car or truck to ANY charity.
Because if you select the wrong charity, you will not receive a car donation tax deduction. Worse, the people who really need your donated car or truck will not get anything. Go to the Secretary of State website for any state, and you will probably find something about bogus charities operating in that state.
Unfortunately, there is a non-stop flow of fraud charities forming all the time. For every one that gets caught and shut down, two more appear. So how can you quickly check out a charity beforehand? Many states have websites where you can type the name of a charity into a search box. Many have databases of charities that have registered with them that you can search.
You need to realize, however, that just because a charity is registered does not mean that the state endorses the charity. In fact, it could turn out that a registered charity gives only a tiny percentage of their proceeds from donations to the needy. So what further checks can be done to make sure a charity is a good one, in addition to being legal?
The answer is you check with online charity watchdog services. Their databases have lists of charities that meet certain standards. There you can find out if the charity you are researching is in ‘good standing’ or not.
Applying for a car donation tax deduction is likely one reason you have for donating your car or truck to a charity. But the bigger benefit is that good feeling you will get from having done something truly worthwhile for a family less fortunate than yourself. So qualify a charity the right way in order to get both benefits!
The IRS (Internal Revenue Service website has good information on car donation tax deductions. A searchable list of charities able to take tax-deductible contributions is the IRS Pub 78. There are also downloadable .pdf documents on their web site that explain all you need to know about vehicle donation tax deductions. The main one you would want to download is called, "A Donor’s Guide to Vehicle Donation" (which is IRS Publication 4303).
