Comments on: IRS Car Charity Rules Drives Donations Down

By: sandrar

sandrar — Thu, 10 Sep 2009 18:51:40 +0000

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By: Another Tax Geek

Another Tax Geek — Wed, 16 Jul 2008 20:29:19 +0000

One of my longstanding pet peeves is seeing ads on buses suggesting big tax savings by donating cars to certain ‘charities’, as it seems wrong for one gov’t agency to make $ advertising how to fleece another gov’t agency. I’m glad to see these scams closed down. Legitimate tax planning is one thing, but these were just bogus deductions.

By: Kelly

Kelly — Tue, 15 Jul 2008 13:18:46 +0000

Robert -
I think they’re saying both: that the total number of cars donated dropped and the the value of the cars which were donated dropped. Now that the value has to be proved (by sale) rather than agreed upon (as before), I think that fewer folks feel compelled to take advantage of this deduction (read “take advantage” how ever you want).

You can read the GT statement about the study on their website here: http://www.grantthornton.com/portal/site/gtcom/menuitem.550794734a67d883a5f2ba40633841ca/?vgnextoid=d50262de2d02b110VgnVCM1000003a8314acRCRD&vgnextfmt=default

I, too, am interested to see the filing stats for 2007 as a result of the changes to charities – I also want to see what the increased filings meant for IRS in terms of revenue. So far, those full stats have not been made available for 2007.

By: Urbie

Urbie — Tue, 15 Jul 2008 13:13:58 +0000

This is a good thing. As Flach points out, the bogus book-value donations were a Golden Fleece on the rest of us.

As for myself, when I want to give to a charity, I pull out my checkbook. (I don’t have enough deductions to itemize, either.)

Urb

By: Robert D Flach

Robert D Flach — Tue, 15 Jul 2008 13:09:48 +0000

Kelly-

When the Grant Thornton report states “the number of car donations valued at more than $500 dropped by approximately 67%. The total value of donations fell more than 80%.” are they speaking from the point of view of the charitable deductions claimed on Schedule A or from that of the charities who solicit donations of used vehicles?

Are they saying that taxpayers are claiming smaller deductions or that individuals are donating less vehicles?

The total dollar amount of charitable deductions for donated vehicles claimed would certainly decrease under the new laws. Taxpayers can no longer attempt to get away with deducting the full “blue book” value of a “clunker” that had to be towed away. They are now, in most cases, limited to the sale proceeds of the donated car as reported by the charity on Form 1098-C. This was the intended purpose of the legislation.

I would be interested in learning if there have been a substantial reduction in the number of used cars that are being donated.

While donating a car to charity will result in less dollars in one’s pocket than selling it, it is an easy way of getting rid of an unwanted car. One avoids all the agita and aggravation involved with the private sale of a used automobile.

I would also be interested in learning if the amount of cash contributions to church and charity claimed on Schedule A dropped in 2007 – as a result of the new stricter rules.

TWTP

By: Death & Taxes

Death & Taxes — Tue, 15 Jul 2008 13:02:48 +0000

As I recall, this same phenomenom took place when IRS began requiring Social Security numbers of dependents on returns.

And many, many years ago, there would be people who only reported stock losses, never gains, since Form 1099-B was not issued.