IRS on the lookout for people who break car donation rules

It’s important to be honest when you donate a used car to charity. That might seem obvious, especially since most people make their donation because they want to help people in need. But there are a few people who attempt to “beat the system” by playing fast and loose with the facts when making a car donation in Los Angeles or elsewhere in the United States, and the Los Angeles Times recently reported that the Feds are taking a close look at these people.

According to the story, Marcus Owens, director of the IRS’ exempt-organization division, has decided to pay extra attention to deductions claimed on car donations. Specifically, some people either claim a donation value that is higher than it should be (in order to get a greater deduction) or are donating their cars to organizations that are not charities. It’s important to claim only the fair market value of the donated car when donating vehicles, Owens said, and to make sure you the recipient of the proceeds from your car donation is a licensed non-profit that is registered as such with the IRS.