First of all, I want to state that I am not an attorney or a CPA or anything like that. What follows is not legal or tax advice. Just our opinion on donating your car scams.
First, I want to say that not all appear as it is. When you donate your vehicle to one of these website charities, you are more than likely giving your vehicle to a 3rd party company who is paying the fund for the use of their name. Yes, it is perfectly legal for them to do this. But I don’t think that it is right. We don’t believe that it is morally correct.
A few years back I knew a guy that was in the junk car buying business he was not doing very well; he partnered with a local charity. Within six months this junk car buyer was making big money. I sat down to eat with him and asked him how he was doing it. He explained the donate your car scams to me. He told me to get a charity and pay them $25.00 for each car you get given under their name. I was shocked at this. I didn’t know what to think. This is a very misleading practice.
Now I know some of you are thinking “As long as I get my tax deduction who cares.” Well, let’s look at the tax deduction scam and what happens. What happens is they get or have your vehicle picked up and give you a donation letter. They don’t tell you that the average person only receives $500.00 taken off of their taxes. Some don’t even receive that amount.
My suggestion to you is to go to the IRS website and read up on the charity donation laws; you might be surprised at what you find. If you are going to donate your vehicle to a charity make sure that you are giving it to the charity, not a 3rd person acting on behalf of that charity.
Go to your favorite charity sit down and talk to them. They will be more than happy to help you. Your church is also a foundation to look at. Churches always need donations to help fund the church or community activities. They may even give the vehicle to a local member who is having a hard time.
Our understanding is if you receive anything in return for donating your vehicle then the IRS does not consider that a donation. Some donation scam companies offer you a free vacation, give your car for cash or donate your vehicle today for a voucher.
If you have any question or comments, please feel free to call us at 281-374-4990. We are not offering legal advice. Please consult your tax accountant and lawyer. Don’t by scammed by donating your car scams!
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