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New
Publications Focus On Car Donations
Jul
2, 2004
WASHINGTON
- Internal Revenue Service officials today announced
the release of two new publications dealing with car
donations as part of an effort to help taxpayers avoid
potential pitfalls when they donate automobiles to charities.
The
first publication, Publication 4302, "A Charity's
Guide to Car Donations," addresses issues that
charities need to know to properly operate car donation
programs. The second publication, Publication 4303,
"A Donor's Guide to Car Donations," is focused
on individuals who make such donations.
"We
want people and the charities to make sure they are
taking the proper steps involving vehicle donations,"
said IRS Commissioner Mark W. Everson. "Supporting
charitable activities through tax deductible contributions
is an important element of tax law and serves the national
interest. But we encourage people to proceed carefully
when donating vehicles. There are instances where the
donations may provide little benefit to the charity."
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. Taxpayers who itemize their deductions
may be able to claim a charitable contribution for the
cars they donate to charity. The deduction may not exceed
the fair market value of the car.
In
recent years, the number of car donation programs has
increased dramatically. This growth, however, has taken
place without taxpayers and charities always understanding
their obligations under tax law.
Both
publications were written in conjunction with state
charity officials, as part of an ongoing effort by state
and federal officials to work together to educate taxpayers
and charities.
Publication
4302, "A Charity's Guide to Car Donations,"
provides descriptions of several different car donation
programs, filing and disclosure requirements for charities
operating these programs and related information. Included
among the description of vehicle donation programs is
an example of an arrangement that would fail to preserve
the deductibility of a contribution.
Publication
4303, "A Donor's Guide to Car Donations,"
reminds taxpayer that they need to make sure they are
donating their vehicle to a qualified organization,
receive a written acknowledgement from the charity,
keep records and properly assess the fair market value
of their vehicle.
Both
publications are intended to assist individual taxpayers
and those operating car donation programs to comply
with tax law. Both publications are available at IRS.gov.
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