So how can you protect yourself from cheaters? And what about these new tax rules?
Begin by asking a lot of questions of the charity.
- Find out what percentage of the proceeds from the sale will go to the organization.
- Find out whether the charity intends to sell the car or will keep it for its own use.
- Ask who’s doing the actual selling and what percentage they charge.
Don’t be bashful about asking questions. It’s your vehicle, and this could be the biggest donation you’ll make this year.
Other things to remember:
- Make sure you have the right charity. Many of them have similar names, and it’s easy to confuse a local charity with one from far away.
- If your favorite charity doesn’t advertise that it wants cars, ask anyway. Many need cars to use or would be willing to accept your car and then sell it.
If you still have concerns, contact your state attorney general’s office or your localBetter Business Bureau office for more information.
You should check to make sure that the charity is viewed as a tax-exempt organization in the eyes of the Internal Revenue Service (IRS). Most of these organizations will be listed in IRS Publication 78―Cumulative List of Organizations. Public libraries carry this publication, or you can check the IRS site to see what groups are on the list.
You can also ask the organization to show you a copy of its tax-exempt status determination letter.
Some organizations, such as churches, synagogues, and government entities, aren’t listed in the publication. However, a donation to any of these organizations is still considered to be tax deductible.
It’s a good idea to transfer the title of the vehicle to the organization and make a copy of the title transfer for yourself. Take a picture of your vehicle before handing it over.